* New PM not yet agreed but Papademos tipped
* Venizelos should stay finance minister - opposition source
* New premier must control party chiefs
* Conservatives want technocrats in some major ministries
By Dina Kyriakidou and Lefteris Papadimas
ATHENS, Nov 7 A former deputy head of the
European Central Bank, Lucas Papademos, emerged on Monday as
frontrunner to become Greece's prime minister as party leaders
bargained over who will lead a "100-day coalition" to push
through a bailout before the country runs out of money.
Under EU pressure, an unaccustomed spirit of compromise
seeped into Greek politics as the top parties haggled over the
jobs in a government which will run Greece only until early
elections in February.
A source at the opposition conservatives said they accepted
socialist Finance Minister Evangelos Venizelos could stay in his
job at a time of national crisis, but said nothing had been
agreed yet on who should lead the unity government.
European Union leaders want Greece to form the coalition
quickly and push the 130 billion-euro bailout through
parliament, for the sake of a nearly bankrupt nation and to
shore up confidence in the euro zone.
In Brussels, EU leaders kept up the pressure, saying Greece
could get a delayed instalment of emergency funding this month
from the EU and IMF -- but only if the coalition gave a written
commitment to the new bailout package.
"It is essential that the entire political class is now
restoring the confidence that had been lost in the Greek
commitment to the EU/IMF programme," said EU Economic and
Monetary Affairs Commissioner Olli Rehn.
Greece needs the 8 billion-euro instalment, part of an
original rescue package pulled together last year, to meet heavy
debt repayments next month and avoid defaulting. However,
lenders have held back due to a series of disputes with Athens.
Even the United States weighed in, with the White House
urging Greece to move as quickly as possible to fulfil its
commitments under the rescue package, as speculators pounded
euro zone bond markets.
STILL NO NAME
By late evening the socialist PASOK party and conservative
New Democracy had still not named a new prime minister, and the
opposition source refused to comment on speculation that former
ECB vice president Lucas Papademos would get the job.
Talks continued and the cabinet of outgoing Prime Minister
George Papandreou was due to meet at 1000 GMT on Tuesday.
However, the source told Reuters that New Democracy was
willing to let Venizelos stay. "The economic ministries,
including finance minister Venizelos and his team, should stay
for the sake of continuity," said the source, giving the first
indication of who would occupy any of the cabinet posts.
New Democracy would back the 2012 budget and a bond swap
plan contained in the bailout package, under which the value of
banks' holdings of Greek government debt will be halved.
While the party would support the coalition, it wanted no
cabinet seats itself, the source said. However, the socialists
had to hand certain major ministries such as justice, defence
and the interior over to non-party technocrats, he said.
Whoever leads the transitional government of national unity
will have a monumental task in restoring order to a country
whose chaotic economy and politics are shaking international
faith in the entire euro project.
Despite the sealed lips on both sides, Papademos remained a
possible frontrunner for premier. An aide said the Greek
economist, who left the ECB last year, had arrived in Athens on
Monday from the United States where he is a Harvard academic.
Outgoing Prime Minister George Papandreou has been in touch
with Papademos, a senior government official told reporters.
"The prime minister had several telephone contacts with Mr
Papademos in the last days," the official said.
Papademos oversaw the nation's adoption of the euro in 2002
as Bank of Greece governor before moving to the ECB, and is a
well-known figure in European capitals.
Another possible candidate emerged on Monday. European
Ombudsman Nikiforos Diamandouros, who handles complaints against
EU institutions, said he had been approached to become a
possible candidate to lead the coalition and might be ready to
"contribute" under certain conditions.
Greek media also raised a third possible candidate, the
country's envoy to the IMF, Panagiotis Roumeliotis, a former
socialist economy minister.
A PROBLEMATIC CABINET
Greeks worry that any new premier will struggle merely to
get Papandreou's socialist PASOK party and New Democracy to work
together. "I'm afraid the new government will very soon turn out
to be problematic," conservative former finance minister
Stefanos Manos told Reuters.
"The new prime minister will ... not give the impression
that he is in charge. Everyone will be looking to the two party
leaders who will be running things behind the scenes," he said,
adding: "The civil service won't implement any decision and
everyone will be waiting for the election."
At least the two parties agreed on the likely lifespan of
the coalition, deciding in the early hours of Monday morning
that Feb. 19 would be the preferred date for an election.
Papandreou, who sealed his fate last week with a shortlived
attempt to call a referendum on the bailout, will stand down
when the new government takes over, under a deal sealed with New
Democracy leader Antonis Samaras on Sunday.
Greeks have suffered immensely in the two years that
Papandreou has run the country. International lenders have
demanded wave after wave of pay and pension cuts, plus tax
increases and job losses in return for emergency aid. This has
helped to keep Greece in four successive years of recession.
The Communist PAME labour group will hold a rally in Athens
on Nov. 10 to oppose a new government which it said "has the
task to save the monopolies and crush the popular movement".
"They want to vote through the new bailout... which will
leave Greek people with their hands tied for many years."
Greek bank shares , the country's best benchmark
of market sentiment with the government shut out of bond
markets, rose 3 percent on the coalition deal.
A new coalition would be sworn in and hold a confidence vote
within a week if all goes to plan, the government says.
Many Greeks remained sceptical about a coalition tasked with
imposing more austerity to tackle a huge budget deficit.
"Hurrah, we are saved!" said plumber George Vihos
sarcastically. "Why should we celebrate now that they will make
sure we bear the pain?"
Papandreou had sought the referendum to show that harsh cuts
demanded in the bailout had public support, but the risk that a
"no" vote could bring about a sudden bankruptcy caused mayhem in
markets, anger in Europe and rebellion in the ruling party.
He soon ditched the idea and won a confidence vote in
parliament, but only after promising to make way for the
national unity coalition.