Greek PM launches coalition effort

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Embattled Greek Prime Minister George Papandreou on Saturday launched efforts to form a coalition government to run the country for the next four months, arguing the move is vital to demonstrating Greece's commitment to remaining in the eurozone.

Papandreou met President Karolos Papoulias, hours after winning a confidence vote in the Socialist-led parliament on a pledge that he was willing to step aside and form a cross-party caretaker government.

But it remains unclear whether the main opposition conservatives and other parties will take part in the talks and drop a demand for an immediate general election.

"Cooperation is necessary to guarantee — for Greece and for our partners — that we can honor our commitments," Papandreou said at the start of Saturday's meeting.

"I am concerned that a lack of cooperation could trouble how our partners see our will and desire to remain in the central core of the European Union and the euro."

Midway through his four-year term, Papandreou was forced into the move by his austerity-weary Socialist party after he abandoned a disastrous proposal to hold a referendum on a new European debt deal.

Debt-crippled Greece is surviving on a euro110 billion ($150 billion) rescue-loan program from eurozone partners and the International Monetary Fund.

It is currently finalising a second mammoth deal: to receive an additional euro130 billion ($179 billion) in loans and bank support, with banks agreeing to cancel 50 percent of their Greek debt.

"My immediate aim is to do everything I can to create a broad cooperation government ... I am not tied to my post," Papandreou said.

"Cooperation is required for the country. We must not go to elections at this moment because it would have catastrophic consequences for the Greek economy and the livelihoods of Greek citizens," he said.

"The (new debt) agreement is very significant and will relieve much of the burden on the Greek citizen."

Socialist party officials insisted any new government would need until late February to secure the second deal, warning that a snap poll could scuttle it.

They insisted Saturday that Papandreou's offer to step aside was sincere, and called on conservative leader Antonis Samaras to urgently reconsider his party's position.

"If Mr. Samaras were willing to back a new government, the prime minister would resign today," Yiannis Magriotis, a deputy public works minister, told private Skai television.