Europe

Greece opposition chief demands PM quits over debt crisis

Greek President Karolos Papoulias (right) and New Democracy part leader Antonis Samaras at the presidential palace in Athens on 6 November 2011
Image caption President Papoulias (right) saw the main opposition leader a day after meeting PM George Papandreou

Greece's main opposition leader has repeated calls for PM George Papandreou to resign to break the political deadlock over the debt crisis.

Mr Papandreou is seeking to build a government of national unity, but Antonis Samaras of the New Democracy party says the PM must resign first.

Some reports say a coalition deal and Mr Papandreou's resignation could be announced as early as Sunday evening.

An emergency cabinet meeting is under way.

Mr Samaras did not state explicitly whether he would join a government of national unity, but said that if the PM resigned, "everything will take its course".

'Close to consensus'

A government official has indicated that a deal is drawing closer.

"I believe that we are very close to reaching a consensus," said deputy government spokesman Angelos Tolkas, quoted by Reuters news agency.

There has been speculation that a new governing coalition could be led by Finance Minister Evangelos Venizelos.

Mr Papandreou has invited Mr Samaras to joint talks with the president later on Sunday, state television said. There has been no confirmation Mr Samaras will agree to attend.

Emerging from a short meeting with President Karolos Papoulias, Mr Samaras said: "As long as Papandreou has not decided what he wants to do, it is blocking any solution."

He has previously labelled Mr Papandreou as "dangerous" for Greece".

Mr Samaras has backed the idea of a caretaker government to secure parliamentary approval of a new eurozone bailout package, but has insisted that early elections are called.

Mr Papandreou says early elections would "have catastrophic consequences for the economy and for the Greek people".

Two opinion polls published on Saturday suggested that Greeks would prefer the option of a national unity government to snap elections, Reuters news agency reported.

'High stakes'

President Papoulias has been urging the opposing sides to overcome their differences and work together to resolve a crisis that has jeopardised the entire euro project.

"Consensus is the one and only way," Mr Papoulias told the prime minister on Saturday, a few hours after Mr Papandreou had narrowly won a vote of confidence in parliament.

Athens and EU flag What went wrong in Greece?

What went wrong in Greece?

An old drachma note and a euro note
Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.

What went wrong in Greece?

The opening ceremony at the Athens Olympics
Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.

What went wrong in Greece?

A defunct restaurant for sale in central Athens
The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.

What went wrong in Greece?

A man with a bag of coins walks past the headquarters of the Bank of Greece
Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.

What went wrong in Greece?

Workers in a rally led by the PAME union in Athens on 22 April 2010
There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.

What went wrong in Greece?

Greece's problems have made investors nervous, which has made it more expensive for other European countries such as Portugal to borrow money.
Eurozone leaders are worried that if Greece were to default, and even leave the euro, it would cause a major financial crisis that could spread to much bigger economies such as Italy and Spain.

What went wrong in Greece?

Greek Prime Minister George Papandreou at an EU summit in Brussels on 26 March 2010
In 2010, the EU, IMF and ECB agreed a bailout worth 110bn euros (£92bn; $145bn) for Greece. Prime Minister George Papandreou quit the following year while negotiating its follow-up.

What went wrong in Greece?

Lucas Papademos
Lucas Papademos, who succeeded Mr Papandreou, has negotiated a second bailout of 130bn euros, plus a debt writedown of 107bn euros. The price: increased austerity and eurozone monitoring.

What went wrong in Greece?

Crowds
In May 2012 elections a majority of voters backed parties opposed to austerity, but no group won an overall majority resulting in political deadlock. Fresh elections have been called in June.
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The BBC's Mark Lowen in Athens says this has now become a high stakes game of political brinkmanship, and nobody can tell who will blink first.

But politicians must find a solution in order to ratify the next 8bn euro ($11bn) instalment of the eurozone bail-out package by mid-December, enabling them to pay public sector salaries and pensions and avoid bankruptcy.

Greece's mounting debt crisis and the implementation of austerity measures have proved hugely unpopular with the public, prompting widespread protests and strikes.

But if Greece defaults on its debts, the cost of borrowing would rocket for other countries, potentially leading to a new banking crisis.

On Monday, Mr Papandreou shocked EU partners and sent markets into turmoil by calling for a national referendum on the deal which they thought had been secured.

The vote was called off just days later, but only after triggering the wider financial and political crisis.