Greek parties agree to form coalition government

Associated Press
A  street vendor holds an umbrella to avoid the sun in the northern port city of Thessaloniki, Greece, on Tuesday, June 19, 2012. European leaders are locked in a fierce debate over how to solve the debt crisis that is killing off growth on the continent, including whether to ease up on the terms of Greece's bailout deal.(AP Photo/Nikolas Giakoumidis )
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ATHENS, Greece (AP) — The three parties that back Greece's commitments to bailout creditors have agreed in principle to form a coalition government and are negotiating the final details, officials said Wednesday.

The agreement follows protracted negotiations between the conservative New Democracy party, the Socialist PASOK and the smaller Democratic Left party, after a national election on Sunday. New Democracy won the vote but needs other parties to form a majority coalition.

Democratic Left spokesman Gerasimos Georgatos said his party is committed to joining a government headed by the conservatives.

"We are offering a vote of confidence, not a vote of tolerance," he said. "We will be part of the government. That means that even if we disagree on a specific draft law, we will not withdraw our support or bring down the government."

The parties are still discussing the new government's policy platform and who will be given cabinet positions.

"We will have a government today," said a PASOK spokesman, who asked not to be named as the talks are still under way.

Creation of a pro-bailout coalition with a strong parliamentary majority would end weeks of political uncertainty in Greece that has affected markets worldwide. A inconclusive election on May 6 had led to protracted, failed talks on forming a new Greek government and threatened to plunge Europe deeper into its financial crisis. The June 17 vote raised fears that anti-bailout parties would win and end up having Greek leave the 17-nation eurozone.

Greek stocks rose Wednesday on expectations a government can be formed, gaining more than 2 percent.

In both elections, Greek voters angry at years of income cuts, deteriorating state services and galloping unemployment voted strongly for parties promising to end the hardship by tearing up the country's pledges for continued austerity and reforms. However, the anti-austerity standard bearer — the radical left Syriza party — finished a narrow second in Sunday's election that gave New Democracy 129 of Parliament's 300 seats.

But this time, the conservatives can form a strong parliamentary majority of 179 legislators with the third-placed PASOK and Democratic Left.

Earlier Wednesday, hundreds of poverty-stricken Greeks queued in a central Athens park for free vegetables. Cretan farmers handed out some 2,700 10-kilo packages of produce, in cooperation with the capital's municipal authorities.

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