Talks on Greek coalition drag into third day

Papandreou is expected to request a meeting with the president to hand in his mandate Talks on the creation of a unity government to pull Greece out of a debt quagmire dragged into a third day Wednesday after hitting a hurdle over EU demands on a desperately needed rescue package .
Political leaders failed Tuesday to name a power-sharing coalition and new prime minister after the conservative opposition rejected EU insistence that a new government agrees to the terms of the massive bailout in writing.
The debt-laden country is under intense international pressure to move swiftly to stave off bankruptcy amid fears the crisis in Greece and now Italy could destabilise the entire eurozone.
Outgoing socialist Prime Minister George Papandreou is expected Wednesday to request a meeting with President Carolos Papoulias to hand in his mandate, after which political chiefs would be summoned to help form a new government.
However, it is still not certain a breakthrough is in sight.
Early Tuesday, former European Central Bank vice-president Lucas Papademos had looked certain to be named interim prime minister but it was unclear how long the opposition New Democracy party's stance would delay an announcement.
"The fact that Europe has lost all faith in the (socialist) government's credibility cannot (be used) to insult our national dignity," New Democracy spokesman Yiannis Michelakis said in a statement.
Eurozone chief policymaker Jean-Claude Juncker demanded Monday that the rival Greek parties involved in forming an interim government agree in writing to the terms of the international bailout sealed at an EU summit in October.
New Democracy head Antonis Samaras said Tuesday he backed the rescue deal as "inevitable" but saw no need for a written pledge.
"I have repeatedly explained why the application of decisions taken (at the October summit) are inevitable to protect the Greek economy and the euro," Samaras said in a statement.
"I won't allow anyone to doubt these statements," he said. "There is such a thing as national dignity."
But EU economic affairs commissioner Olli Rehn insisted a written pledge was vital to repair a "breach of confidence" by the outgoing Greek government with a short-lived call for a referendum on the bailout.
"It is indeed essential that the new government expresses its unequivocal commitment in writing regarding all decisions taken" at an EU summit in October that set up the lifeline for Greece, Rehn told reporters in Brussels.
The new unity government, backed by the governing Pasok socialists and New Democracy, will be tasked with implementing the bailout deal to stave off bankruptcy and keep Greece in the eurozone.
"In another two-three days people will be throwing tomatoes at us, there must be a deal tonight," outgoing agriculture minister Costas Skandalidis told NET.
Papademos still appeared favourite to become prime minister although a series of demands he made to take on one of the world's least enviable jobs apparently prevented his appointment on Monday.
Media reports said Papademos wants to extend the new government's term to beyond February 19, a date tentatively set for a fresh round of elections, and appoint opposition conservatives to the cabinet.
The names of two fall-back candidates were also circulating: European ombudsman Nikiforos Diamantouros, 69, and 64-year-old former finance minister Panagiotis Roumeliotis, who represents Greece at the IMF.
But Papademos, a technocrat who has won international respect for his financial expertise as the right-hand man of former ECB chief Jean-Claude Trichet, remains frontrunner.
The EU rescue package for Greece agreed after tortuous negotiations between governments and banks would give Athens 100 billion euros in eurozone loans, 100 billion in debt reduction and 30 billion in government guarantees.
But it also comes with strings attached.
Greece must further tighten its belt, after two years of painful austerity measures that sparked often violent protests on the streets and eventually brought down the government.
The new government's first task will be to persuade the EU and International Monetary Fund to unlock an eight billion euro ($11 billion) slice of funds the finance minister says is needed by December 15 to pay the bills.