Greece: No deal on interim government

ATHENS -- Greece failed yesterday to reach a breakthrough on an interim government after three days of intense talks, despite international pressure and the threat of imminent bankruptcy.

Outgoing Prime Minister George Papandreou said earlier that the two main parties had agreed to form an interim coalition government to secure a new $176 billion debt deal.

"Today, despite our political and social differences, we are putting aside our conflicts," Papandreou said in a televised address. "We will take the necessary steps together . . . to secure the implementation of the European debt deal, decisions which offer our country security," he said.

But less than an hour later, the power-sharing talks appeared to have broken down between Papandreou's Socialists and the opposition conservatives led by Antonis Samaras.

The president's office said the meeting would reconvene Thursday. No reasons were given for the delay.

Former European Central Bank vice president Lucas Papademos had emerged as a leading candidate to head the new national unity government, which is to have a caretaker role until elections on Feb. 19. But his candidacy appeared to have lost ground and the names of Socialist PASOK party veteran Apostolos Kaklamanis and parliament speaker Filipos Petsalnikos came forth in widespread media speculation.

After Papandreou and Samaras agreed during the weekend to form a 15-week interim government, Socialist cabinet ministers handed their resignations Tuesday to Papandreou.

The country could be forced into bankruptcy before the end of the year without the approval of the deal and the associated release of an $10.8 billion loan installment.

According to the daily Kathimerini, Samaras has balked at eurozone demands for a written commitment to the fiscal targets and measures demanded by the country's international lenders.

Samaras is insisting that a verbal commitment should be enough to reassure Greece's lenders. "There is such a thing as national dignity," he said. "I have repeatedly explained that, in order to protect the Greek economy and the euro, the implementation of the Oct. 26 agreement is inevitable." He was referring to an EU agreement regulating losses for Greek creditors.