Starving Greeks queue for food in their thousands as debt-wracked country finally forms a coalition government... but how long will it last?

Queues form as desperate people received food handouts from Crete's farmers

Antonis Samaras sworn in as prime minister as head of conservative-led three party coalition

New coalition vows to renegotiate crippling bailout agreement to ease burden on debt-crippled country

Greek stocks rose marginally in response to the coalition deal

Greece had been effectively ungoverned after two election in six weeks resulted in political stalemate

Country struggling through a fifth year of recession, with unemployment spiraling to above 22 per cent

Leader of Democratic Left says coalition will 'lift those measures that have literally bled society'

Starving Greeks queued around the block for free food handouts yesterday as the country's politicians managed to end a crippling stalemate to form a coalition government.

Young children as well as the elderly waited in line in Athens to collect the parcels of fruit and vegetables donated by farmers from Crete to help ease the devastating austerity faced by many Greeks.



But as hungry people collected food, a few miles away a new conservative-led alliance was formed, vowing to renegotiate the country's strict European bailout in a bid to breath economic life back into the debt-stricken country.

Lifeline: Hundreds of poverty-stricken Greeks are queuing for free vegetable handouts as politicians finally agree to form a coalition government

Desperate: An elderly lady, left, and a woman, accompanied by her son, carries a box of vegetables as thousands of Greeks and foreign immigrants line up during a free vegetables Despair: Pensioners joined the lengthy queues behind barriers in Athens where people were waiting for a free food handout Hungry: Greeks line up for the food handouts, donated by Crete's farmers Conservative Antonis Samaras was sworn in as prime minister and head of a three-party coalition that will uphold the country's international bailout commitments.

In the hot seat: New Prime Minister Antonis Samaras vowed to rescue Greece's economy as he spoke for the first time after being sworn in to office at the presidental palace The move ends a protracted political crisis that had cast grave doubt over the country's future in Europe's joint currency and threatened to plunge Europe deeper into a financial crisis with global repercussions.

Samaras, an American-educated 61-year-old economist, was sworn in three days after his party won the second national elections in six weeks but without enough votes to form a government on its own.

His New Democracy party will join forces with the socialist PASOK party, which came in third place, and the smaller Democratic Left led by Fotis Kouvelis.

Discussions on the lineup of ministers were expected to be completed by Wednesday night.

‘I will ask the new government that will be formed tomorrow to work hard so that we can offer tangible hope to our people,’ Samaras told reporters as he left the presidential mansion.

Greek stocks rose marginally in response to the news, with Athens shares closing up 0.5 percent, limiting earlier gains.

The new prime minister was to meet with outgoing Finance Minister Giorgos Zanias, PASOK head Evangelos Venizelos and Kouvelis on Wednesday evening. All three parties broadly back Greece's pledges to bailout creditors for further austerity and reforms, although they have pledged to renegotiate some of the terms for the rescue loans. Vow: Antonis Samaras, right, crosses himself during a swearing-in ceremony at the Presidential Palace as at the background Greek president Karolos Papoulias looks on Deal: Greek conservative leader Antonis Samaras, left, shakes hands with Greek President Karolos Papoulias, center, as Greece's Orthodox Archbishop Ieronimos looks on after a swearing in ceremony at the Presidential palace in Athens Ceremony: Newly elected Prime Minister, Antonis Samaras, right, bows in front of Ieronimos, Archbishop of Athens and all Greece, during a swearing in ceremony New Democracy and PASOK are also looking for an extension of at least two years in the deadlines for implementing fresh cutbacks worth a total 14.5billion euro ($18.42 billion).

Democratic Left leader Fotis Kouvelis went a bit further today, saying that Greece should eventually ‘disengage’ from the austerity commitments and ‘lift those measures that have literally bled society.’ Greece has been dependent on the loans from other Eurozone countries and the International Monetary Fund since May 2010. In return, it has imposed deep spending cuts, slashed salaries and pensions, and repeatedly hiked taxes.

The measures have left the country struggling through a fifth year of recession, with unemployment spiraling to above 22 percent and tens of thousands of businesses shutting down.

The face of the crippling poverty gripping the country was plane to see as hundreds of poverty-stricken Greeks queued in a central Athens park for free vegetables. Misery: A young mother with her two daughters carries away a box full of vegetables to help feed her family in the debt-stricken country Help: Volunteers hand out boxes of fresh fruit and vegetables donated to hungry Greeks in Athens by farmers from Crete

Austerity: Many Greeks cannot afford to feed themselves as deep austerity measures imposed by Europe as part of the bailout agreement take their toll Cretan farmers handed out some 2,700 10-kilo packages of produce, in cooperation with the capital's municipal authorities. Among the people lining up was Panayiota Sidera, 31, from Athens. She said she has been unemployed for two-and-a-half years and her husband is also out of a job. The couple is living on a (euro) 250 monthly disability pension and rent from an apartment they own, and has a (euro) 540-a-month loan installment to pay.

‘That's my predicament,’ she said, adding that the food handout ‘is helping people, and I'm grateful.’

‘The government should have been doing this years ago,’ she said.

Zanias is to represent Greece at an upcoming meeting of Eurozone finance ministers.

The eurogroup talks ‘will be the first big battle on the revision of the bailout agreement, the creation of a framework that will allow us to move to positive growth and to combat unemployment which is the big problem of Greek society,’ Venizelos said earlier in the day.

In Sunday's vote - and the previous, inconclusive May 6 election - angry voters strongly favored parties promising to end the hardship by tearing up Greece's pledges for continued austerity and reforms.

However, the anti-austerity standard bearer - the radical left Syriza party - finished a narrow second in Sunday's election that gave New Democracy 129 of Parliament's 300 seats.

Deal: Socialist PASOK party leader Evangelos Venizelos, left, and Fotis Kouvelis, the leader of Democratic Left party, centre, have agreed to form a coalition led by Antonis Samaras, right



The development is expected to calm fears that a protracted political crisis in debt-struck Greece could have led to the country being forced out of the joint European currency.



Such an event could have dragged down other financially troubled Eurozone nations and hammered the global economy.

GERMAN CHANCELLOR BRACED FOR TOUGH RECEPTION AT GREECE Vs GERMANY FOOTBALL MATCH

Chancellor Angela Merkel will travel to Germany's European Championship quarterfinal match against Greece for a game that brings together nations at opposite ends of Europe's debt crisis, the German government said Wednesday.

Germany, Europe's biggest economy, has been a major contributor to international bailouts for Greece and was instrumental in demanding structural reforms and hugely unpopular spending cuts in return. The presence of Merkel, who is not a popular figure in Greece, could add extra political spice to Friday's encounter - though team officials on both sides have been at pains to stress that it is purely a sporting event. 'She hopes for an exciting and fair match.

'This is a football match, and it is exclusively about sport.' government spokesman Georg Streiter told reporters in Berlin.

PASOK came third in Sunday's election, which was won by the conservative New Democracy party.



No party won enough votes to form a government on its own, leading to three days of coalition talks.

Greek politicians had been locked in negotiations to form a coalition government throughout the night after the second general election in six weeks.



As an agreement neared, Mr Venizelos’s socialist Pasok party, which came third in Sunday’s elections, said: ‘With [radical Left-wing party] Syriza’s refusal, the only practical solution now is the creation of a government with the support of New Democracy, Pasok, and the Democratic Left.



‘This government must be formed as soon as possible. As now things stand, this can be achieved by midday Wednesday.’



His party, he said, ‘will support this government sincerely and will participate in it in the most beneficial way in order to make it effective and credible’.



There had been hopes the deal would have been done by yesterday. The timetable for negotiations runs out today.

Rival party leaders were today locked in a second day of power-sharing talks, with two potential minority partners voicing hope that a coalition can be quickly formed.

It comes after the debt-crippled country's second inconclusive election in six weeks.

Uneasy allies: As New Democracy leader Antonis Samaras, left, tries to form a coalition government, he has been meeting with heads of other political parties, such as Independent Greeks leader Panos Kammenos, right

Glimmer: The ultra-right party Golden Dawn (left) may have won 18 seats will not be involved in the new conservative-led coalition headed by Antonis Samaras (right)



At the core of any administration will be Antonis Samaras' New Democracy party, which came first in Sunday's vote and won 129 of Parliament's 300 seats - but not enough to govern alone.

Samaras is seeking an alliance with the third-placed Socialist PASOK and the smaller Democratic Left party.

That would broadly fulfill Greece's pledges to its bailout creditors for further cutbacks and reforms, keeping the country within Europe's joint currency.

Otherwise, Greece would run out of cash and the continent could plunge deeper into a financial nightmare with global repercussions.

The main sticking point promises to be how much Greece is willing to tempt fate by seeking a more lenient deal from creditors fed up with missed targets and broken reform pledges.

PASOK leader Evangelos Venizelos met with Democratic Left head Fotis Kouvelis, who told reporters afterward that a three-party deal could potentially be achieved 'within hours'.

Stalemate: Alexis Tsipras, leader of radical left Syriza party, takes to the podium on Sunday to vow to continue the fight against Greece's crippling austerity measures Kouvelis said parties first had to agree on a policy platform, and on who would be appointed to the cabinet. He said: 'I believe the process is gathering speed, the country must have a government ... and in the next hours, if there is an agreement, it will be possible for us to proceed.' Kouvelis insisted that parts of Greece's harsh austerity program must be revised, saying the country 'has been pulverised by pitiless measures'. Venizelos, who has pressed for an agreement by tonight, said he was optimistic a deal could be reached. He added: 'I am confident after my meeting with Mr Kouvelis, our views are very close. Greece must - and will - have a government as soon as possible. We agreed that the necessary processes must be accelerated.' Both the conservatives and PASOK have pledged to respect the commitments for further austerity and reforms that Greece undertook as conditions for two massive international bailouts since May 2010.

Threat: It is not just the future of Greece that is at risk, the whole single currency project could be scuppered if the coalition government is not formed

They are pressing for an extension of at least two years in the deadline, which would alleviate the immediate impact of new cutbacks and is seen as a likely concession by creditors.

The Democratic Left is anti-austerity in principle, but wavering.

Austrian Finance Minister Maria Fekter said any changes to the bailout deal would be 'an adaptation of a pragmatic nature' after debt inspectors from major creditors visit Athens.

A European Union official said the terms of Greece's bailout will be renegotiated because worsening economic conditions have made the old agreement an 'illusion'.

He said that the goals of the agreement would still be to reduce Greece's debt and reform its economy to make it competitive.

But how they are achieved would be up for discussion, the official said on condition of anonymity, citing policy.

The second-placed, anti-bailout Syriza radical left party has refused to join in a coalition.

Party leader Alexis Tsipras campaigned on a strong anti-bailout ticket, vowing to scrap the country's pledges and play tough with creditors - Greece's European partners and the International Monetary Fund.

His message resonated strongly with an austerity-weary electorate, which propelled Syriza from 4.6 per cent in 2009 to nearly 27 per cent and gave anti-austerity parties more than 50 per cent in total. The reasons are visible around the country.



Voting: A Greek Orthodox priest casts his ballot at a primary school in Athens

As more than four years of recession and dwindling incomes take their toll, tens of thousands of businesses have closed, unemployment is above 22 per cent and many Greeks see emigration as their only hope for a decent life.

In order to pass most laws, a government needs a simple majority of 151 seats.

But to have any chance of success, it would require considerably more than that, especially amid the social turmoil of the past two-and-a-half years of harsh austerity in Greece.

Together with PASOK and the Democratic Left, Samaras' party would have 179 legislators, enjoying a strong majority of 28 seats.

Hopes that a deal can be struck boosted Greek share prices, with the battered Athens stock exchange gaining 2.9 per cent in afternoon trading.

Greece's short-term borrowing costs declined slightly today, with the interest for a new 13-week treasury bill issue reaching 4.31 per cent, down from 4.34 per cent last month.

The total sum raised was €1.3billion, with the auction 2.2 times oversubscribed.

Samaras' three-day mandate to form a government expires on Wednesday. If it fails, Syriza would get a chance to form a government, followed by the Socialists.

But Tsipras has said he will not even try to create a government. Venizelos has advocated circumventing the mandate process and proceeding straight to a meeting of party leaders under President Karolos Papoulias.

Venizelos has insisted that Syriza should participate in any coalition government, in what appears more an attempt to show the left-wing party up as intransigent rather than a realistic effort to drag it into governance.

Setting apart their bitter rivalry stemming from four decades of what was effectively a two-party system, New Democracy and PASOK took part in a brief coalition government earlier this year.



