George Papandreou, Greece Debt Crisis | featured news

Greek PM George Papandreou says an agreement has been reached on the creation of an interim government that will secure the new debt deal.

Greece’s two main political parties reached an agreement Sunday to form a unity government, giving Europe a steadier partner as it works to avert a larger financial crisis on the continent. Prime Minister George Papandreou will resign after the new government is formed, officials said, although the timing, and his successor, remained unclear.

Greece's embattled prime minister and main opposition leader agreed Sunday to form an interim government to ensure the country's new European debt deal and oversee early elections, capping a week of political turmoil that saw Greece facing a catastrophic default and threatening its euro membership.

Prime Minister George Papandreou survived a crucial confidence vote in Parliament and pledged to form a unity government with a broader consensus, regardless of whether he would lead it.

Greece has secured a second bailout from the European Union and the International Monetary Fund, and it too will be on the order of €110 billion, Prime Minister George Papandreou said.