Greek government may resign as opposition calls for transitional government

Greek television is reporting that Prime Minister George Papandreou’s government might resign. As Papandreou’s met his cabinet, right-wing opposition leader Antonis Samaras called for a transitional government to ratify the latest phase of the eurozone bailout and prepare elections.

Reuters/Yves Herman

"I ask for the formation of a temporary transition government with the exclusive responsibility to immediately hold elections, and ratify the loan deal under the present parliament," Samaras said in a televised address.

Until now Samaras’s New Democracy (ND) has opposed the terms of the bailout but on Thursday he declared, “The new loan deal is inevitable and must be secured.”

The declaration would open the way to the formation of a coalition government, which would probably contain both ND and Papandreou’s Pasok as some ministers have suggested.

The government faces a vote of confidence on Friday.

Greek stocks soared 3.82 per cent after the statement and European shares headed back up after a dip in the morning with hopes that the G20 summit in Cannes will move closer to resolving the crisis.

French President Nicolas Sarkozy opened the summit on Thursday afternoon, following a meeting with the US’s Barack Obama.

"The most important aspect of our task is to resolve the financial crisis here in Europe," Obama said at a press conference where he expressed the hope that Sarkozy’s newborn daughter, Giulia, would look more like her mother than her father.

Obama and Sarkozy are to take part in a joint interview to be broadcast on the TF1 and France 2 channels.