Athens looks set to form a new government

ATHENS is likely to form a new government today following the U-turn by the prime minister when he reversed his shock decision to hold a referendum on his country’s bailout package.

A vote of confidence in the government of Georges Papandreou is expected to go ahead later today in Athens and some believe it could end his premiership.

There was huge relief among EU leaders attending the G20 summit in Cannes when Mr Papandreou made his announcement after massive pressure from the German Chancellor Angela Merkel and French President Nicolas Sarkozy.