Greek PM: New interim govt will secure debt deal

ATHENS, Greece (AP) _ Greece's outgoing Prime Minister George Papandreou said Wednesday that an agreement had been reached with the opposition on the creation of an interim government that will secure the country's new debt deal.

The two main parties, Papandreou's Socialists and the opposition conservatives, led by Antonis Samaras, have spent three days in intense power-sharing negotiations.

``Today the main political forces are joining together, to guarantee to Greece's citizens that in the following months we will do whatever is necessary not only to secure the country's position in the euro and implement the (debt deal) decisions ... but also to make use of its great benefits,'' Papandreou said in a televised address.

He then headed to a meeting with the country's president, where he was expected to formally resign _ half way through his four-year term. Papandreou wished the next prime minister well, but gave no indication of who it would be.

``Today, despite our political and social differences, we are setting aside the sterile conflicts. A government of political forces is taking over that goes beyond parties and personal biases,'' the 59-year-old Papandreou said. ``We will take the necessary steps together with national unity. To secure implementation of (European debt deal) decisions which offer our country security in particularly troubled times.''

The political crisis erupted last week, when Papandreou said he would put the new European rescue package to a referendum. Other eurozone nations were horrified by the delay, markets around the world tanked and Greece's international creditors froze the payment of the next bailout installment. Faced with a backlash from within his own Socialist party, where lawmakers were calling for him to resign, he withdrew the referendum plan on Thursday, saying it was no longer necessary after the opposition indicated they would support the deal.

Earlier this week, eurozone finance ministers said the heads of the two main parties had to commit in writing to the terms of the country's bailouts before Athens can receive the next loan installment.

There has been intense speculation in recent days as to who will take over from Papandreou, but the outgoing premier offered only vague hints as to who it might be.

``It was clear that to achieve this effort we would have to agree on a person who would unite us and would be supported by all of us,'' he said. ``I believe the choice we have made is in line with the institutions and will boost the democratic institutions.''

Former European Central Bank vice president Lucas Papademos had been widely tipped as the strongest candidate for interim prime minister. But two officials from the main parties said that by Wednesday afternoon another strong candidate had emerged _ current Parliament speaker and former justice and public order minister Philippos Petsalnikos.

Papandreou said the creation of the new interim government was also a way of ``sending a strong message to our partners and the international community that we Greeks know how to shoulder our responsibilities, we know how to cooperate, to roll up our sleeves and unite in times of hardship.''