MUNICH - After days of chaos, Greece's government and opposition have agreed on a joint alliance that does not include Prime Minister Giorgos Papandreou. The new transitional government's most urgent task is the implementation of the austerity measures imposed by Brussels.

The news was announced Sunday evening by the office of Greek President of the Republic Karolos Papoulias, who had brokered the agreement between Papandreou and the conservative opposition leader Antonis Samaras. After addressing the immediate task of implementing the bailout plan, the transitional government will call an election. It is due to announce the composition of the cabinet and the name of the new prime minister today.

On Sunday, EU Economic and Monetary Affairs Commissioner Olli Rehn called for Greece to form a national unity government quickly, saying that that would be a way for Athens to "restore the confidence" of its euro-zone partners. He went on to say that, since the Greek state only has enough money to last through early December, it was essential that its current Parliament endorse the new bailout plan and implementation measures so Greece can receive the next loan installment.

Monday's meeting of 17 finance ministers of the euro group will address the payout of the tranche, said Rehn, adding that he was expecting to receive from Greek Finance Minister Evangelos Venizelos a convincing report about further steps being taken by Athens.

Mutiny from his allies

Even after Papandreou had won a confidence vote in Parliament on Friday, it was clear that the number of those lined up against him even within his own socialist party, Pasok, was too great for him to stay on as prime minister. Many had asked him prior to the vote to assure them that if they voted yes he would relinquish his post.

The composition of the transitional government and just when new elections should be held are two thorny problems between Mr. Papandreou's party Pasok and the opposition Nea Dimokratia (ND). ND boss Samaras had called for elections within six weeks, Mr. Papandreou however spoke of elections being held in February or March. President Papoulias will invite smaller opposition parties to join the conversation Monday.

ND chair Samaras had originally refused all calls for a national unity government and sharply criticized some of the key details in the bailout packages the Pasok party negotiated with the EU and the International Monetary Fund. Polls show that the ND party is ahead of the Pasok.

Samaras eventually changed his tune, telling the Greek people and Europe that: "We accept the decision to write down part of the debt. We accept the austerity goals. We also accept the structural reforms that have been agreed on. Exactly the way the present prime minister of Portugal did when he was still in the opposition before new elections were held." Samaras had been sharply criticized by European politicians because, unlike the opposition in Portugal and Ireland, he had refused the idea of a unity government. Now, the political dynamic in Greece has changed – even if the finances have not.

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photo - Greek Prime Minister's office