7th November 2011
The Greek Prime Minister George Papandreou is to step down as the Greek political parties form a coalition government as the Telegraph reports.
The move came after the European Union gave Greece 24 hours to come up with a plan for a unity government on Saturday. There is now very little chance that Greece will hold a referendum on the bailout deal and associated austerity measures, a move that was expected to throw the eurozone into yet more turmoil.
The BBC's Mark Lowen says the likely successor is Lucas Papademos – the former governor of the National Bank of Greece and a former deputy at the European Central Bank. He writes:
"While he was at the national bank he negotiated Greece's transition from the drachma to the euro – he will be hoping that if he does take over that that will be a one-way street, that he will not face an inglorious exit of Greece from the eurozone."
Effects on Markets
Stock markets were nervous this morning, down around 1 per cent, as This is Money reports.
The FTSE 100 slid 33.7 points to 5,493.5 as investors assess Greece's progress towards forming a unity government. The DAX is 44.5 points lower at 5,921.6 while France's CAC 40 is off 58.7 at 3,064.9 and Italy's MIB is down 320 at 15,026.6.