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New Greece government agreed, says socialist party leader

AP Photo/Kostas Tsironis

Greece's newly sworn-in Prime Minister Antonis Samaras gestures to supporters after taking over from caretaker Prime Minister Panayiotis Pikramenos at Maximos Mansion in Athens.

ATHENS - A conservative-led Greek government has been agreed and will form a team to "renegotiate" the international bailout deal that would save the country from bankruptcy, the leader of one of the coalition parties said Wednesday.

Socialist PASOK leader Evangelos Venizelos said his party would enter a three-way alliance with the larger conservative New Democracy and that cabinet posts would be decided by Wednesday evening.

He said the key issue would be to form a team to renegotiate the $164.79 billion bailout deal from the European Union and International Monetary Fund.

Greece avoids 'Drachmageddon' but Europe debt crisis remains

"Greece has a government and this is the message that the outgoing finance minister [George] Zanias will take to the Eurogroup," Venizelos told reporters.

Reuters said Antonis Samaras would meet President Karolos Papoulias later on Wednesday to announce the coalition deal, after which he expected to be sworn in as prime minister.

Greece appeared to have avoided crashing out of the euro currency zone early Monday after political parties in favor of an international bailout deal won a slim election majority – but the region's debt crisis showed no sign of abating. NBC's Stephanie Gosk reports.

The opposition radical leftist bloc SYRIZA came second in the election and strongly opposes the bailout. A graph illustrating the results was published on the BBC website.

A Greek exit from the euro joint currency zone is still viewed as a possibility, despite a narrow majority for parties who are broadly in favor of a bailout, despite the inevitable tough austerity measures.

The Daily Telegraph reported that although public sector wages and pensions have been cut by 25-30 per cent since the country’s economic crisis took hold, thousands of redundancies have not taken place as promised, a privatization program has barely got off the ground and tax evasion remains endemic.

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