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Greece Reaches Agreement on Government Coalition [UPDATED]

Greece set to announce new interim government, which will ease economic and political crises.

[UPDATE | Nov. 8, 2011, 5:54 p.m.: The Greek goverment will announce it's new interim government Wednesday afternoon, according to a government official. 

Prime Minister George Papandreou and opposition leader Antonis Samaras reached a historic agreegment to create the interim government, which is expected to usher in the country's $170 billion European rescue package and end the political crisis.

Papandreou has agreed to step aside once a deal is reached.]

Greek political parties continued talks to secure a $179 billion rescue package Monday. Despite the negotiations, markets remained wary and European leaders held back a bailout loan vital to Greece's survival.

Greece's Socialists and conservatives agreed on a unity government Sunday after a looming fincancial crisis. The landmark agreement will form a coalition for the next 15 weeks.

Under the agreement, Greek Prime Minister George Papandreou will step down from office later Monday. A new prime minister would be appointed until a general election on Feb. 19.

"Europe, and the German government too, must be able to see that the Greeks are serious, that it is not just about announcements but about actions," Merkel spokesman Steffen Seibert said.

The eurozone partners and the International Monetary fund issued Greece a $150 billion rescue-loan program in May 2010, but all sides agree it was not enough. A second rescue package has been created in which involves private bondholders have agreed to cancel 50 percent of their Greek debt.

Amidst Greece's political drama, its European neighbors have frozen the $11 billion loan installment until Greece formally approves the new debt deal. The Greek government has said it could go bankrupt within weeks without the money.

Papandreou's pending resignation comes after two years in office.

"It's not the most graceful of ends," said a Cabinet minister who requested to remain anonymous. "But he was politically shattered. He had grown tired. He wanted to leave."

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