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Greek PM, Opposition Leader Reach Deal On New Government

Prime Minister George Papandreou

Prime Minister George Papandreou

Greek Prime Minister George Papandreou and opposition leader Antonis Samaras have agreed a deal on a new coalition government.

The agreement came after the two leaders held talks with the Greek president in an effort to break a political deadlock and thrash out a deal for a national unity government demanded by the country's European partners.

A statement from the Greek presidency said the two sides will meet again on November 7 to discuss who would lead the coalition government, but that Papandreou would not lead the new administration.

The crisis in Athens has threatened the country's ability to avoid a catastrophic bankruptcy and retain its cherished eurozone membership.

EU Economic and Monetary Affairs Commissioner Olli Rehn has said that Greece needs to form a national unity government and push through strict austerity measures to continue membership in the eurozone.

A unity government would help secure a crucial new 130 billion euro ($179 billion) international bailout.

compiled from agency reports