New PM for Greece but will a new government save the country from the debt crisis?

The Greek Prime MInister is on the way out, but the new government has a lot of work still to do. AFP/Aris Messinis

The Greek Prime Minister will resign in an effort to save the bailout deal agreed by the European Union to dig the country out of its debt crisis.

George Papandreou agreed to go following talks with the country’s president and leader of the opposition. A new government of national unity will be formed later today.

The Conversation spoke to Dr Michális S Michael, Deputy Director and Research Fellow at the Centre for Dialogue, La Trobe University about the changes at the heart of the Greek government.

Will the resignation of George Papandreou make a resolution to the Greek economic crisis more likely?

I think the decision by PM Papandreou to resign in favour of a national unity government, which he would not lead, is a very stabilising development. It will bring all the major parties into government to share in the political, social and financial responsibilities ahead of fresh elections which are likely to be called in 2012. It also enables the EU financial package to be dealt with collectively by all political forces in a more consensual fashion. Part of the problem in Greece has been that the opposition has been very unhelpful. So this move will go some way towards addressing the lack of political consensus.

George Papandreou is a serious and sober politician. If you compare him with his neighbour Silvio Berlusconi in Italy, he has proved that he puts Greece’s national interest above personal ambition in holding onto office, as opposed to Berlusconi who has been clinging onto power. Papandreou delivered one of his best speeches as a swansong to the Greek parliament the other day.

Who is likely to lead the new government?

There are a couple of suggestions - the current Finance Minister Evangelos Venizelos is the most likley one. He has a different character and temperament, to the Prime Minister. He’s also been an internal political foe. He ran against Papandreou for the leadership position. There’s also the possibility of a technocrat Lucas Papademos. It may be good idea to have a neutral independent non-politian technocrat to head the government, but on the other hand a strong Prime Minister with political experience and skill is also required.

Is a government of national unity likely to hold?

President Karolos Papoulias brokered the deal which led to the government of national unity. AFP/Louisa Gouliamaki