New Greek government 'will do what it takes'
GREECE'S outgoing prime minister George Papandreou formally announced he was stepping down last night to make way for a new coalition government that would do "whatever was necessary" to keep the country in the euro.
Without actually naming his successor, Mr Papandreou told the nation his party had reached an agreement with the conservative opposition on the creation of an interim government that would secure and implement the country's new bailout deal. Reports last night suggested the veteran politican Filippos Petsalnikos -- the speaker of parliament -- had emerged as the last-minute favourite to lead a national salvation government and pull Greece back from the economic abyss.
Mr Papandreou had come under heavy pressure from EU leaders to stand down after he unexpectedly announced a referendum on the EU bailout deal that had been agreed to save Greece.
That plan has now been scrapped and a government of senior politicians and technocrats will have about three months to implement an austerity package in return for €130bn of funding.