Greek leaders talk amid hopes of breakthrough

Papandreou told an emergency cabinet meeting that he had asked head of state Carolos Papoulias to host a meeting with conservative leader Antonis Samaras, state TV NET reported.

The proposed meeting comes as a damaging political stalemate threatens to drain the country of cash and causes mounting impatience among Greece\'s European peers.

But the embattled premier is still refusing to resign -- a condition set by the opposition -- before a deal is hammered out, arguing that the country will need representation at a Eurogroup meeting of finance ministers on Monday, TV NET said.

Talks on forming a unity government which Papandreou says is vital to pass a much-needed EU bailout plan and keep Greece in the euro have been bogged down over the issue of elections.

Samaras has called for snap polls, whereas Papandreou has said this would be a "catastrophe," as despite a clear lead for New Democracy in the polls, both of the main Greek parties have lost most of their credibility in the eyes of the people and it is likely that no clear victor would emerge.

The conservatives are blamed for building up huge deficits in their five years in power until 2009 while the socialists are vilified for calling in the EU and International Monetary Fund to rescue the country and ordering two years of stinging austerity.

European leaders are increasingly frustrated at the political bickering in Athens at a time when they want to press ahead with hard-won agreements on tackling the eurozone debt crisis.

Polls published in the Sunday newspapers show that the Greek people are largely in favour of a unity government and want to keep the euro.

Eurogroup finance ministers on Monday will discuss whether the conditions are in place to release an eight billion euro ($11 billion) slice of bailout cash that Greek Finance Minister Evangelos Venizelos says is needed by December 15 to keep the country afloat.

There will likely also be no let-up in the pressure on Athens to implement stinging austerity measures in return for the cash payment, made available under the first May 2010 Greek bailout package.

Papandreou has said he is prepared to step aside for the good of the country.

But government sources say the premier would not step aside until the two main parties clinch a deal on a national unity administration, warning of a possible "power void."

"If the government resigns today, who will represent the government on Monday?" asked Interior Minister Haris Kastanidis, referring to the Eurogroup talks.

"It is evident that the government will step down when a national agreement is concluded," he told reporters outside parliament.

A government source, close to Papandreou\'s socialist Pasok party, told AFP: "I am sure he will resign, there is a possibility he does so today, but he first needs an agreement for a government."

The eurozone finance ministers on Monday "will certainly reiterate their desire to see all the main parties subscribe to the adjustment programme," said a European government source in Brussels.

Ratcheting up the pressure on politicians to put aside their differences, a government spokesman recalled late Saturday that Athens had only seven weeks to put the terms of the EU rescue package in place.

"According to the non-negotiable timetable ... of the European Summit (where the rescue plan was agreed), the new agreement needs to be ratified in parliament by the end of 2011," spokesman Ilias Mossialos said in a statement.

"Our European partners will not wait. We have only seven weeks and we cannot lose a single day," he added.

Sunday capped a week that has been tumultuous even by the recent standards of Greece, which finds itself trapped in the eye of the eurozone debt storm.

Papandreou set the ball rolling on Monday with a shock announcement that Greece would hold a referendum on the terms of a second bailout deal, agreed in late October and which calls for further fierce austerity measures.

The move stunned fellow European leaders, sent global markets into a tailspin and earned the Greek prime minister a humiliating dressing-down by the leaders of France and Germany on Wednesday ahead of a G20 meeting.

Hastily retracting the proposal, Papandreou then turned disaster into temporary victory by winning a nail-biting confidence vote early Saturday by offering to step down in favour of a unity government.

But now Papandreou faces the challenge of forging consensus with an intransigent Samaras on a government to take Greece forward amid growing speculation that Finance Minister Venizelos will be the man to ultimately take the helm, at least temporarily.

The Greek people, meanwhile, battered by two years of stringent austerity measures that have crippled the economy and sent unemployment soaring, appear to have had more than enough of their squabbling leaders.

"The people are suffering at the moment and they (politicians) are not budging," said Marianna, a shopkeeper.

"A unity government with whom? With the same people? We will have the same results," she said gloomily.

"Papandreou. Samaras. They are all the same," said Takis Karalambos, as he sipped coffee outside a market in Athens.

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