AFP

ATHENS GREEK Prime Minister Lucas Papademos was to formally step down on Wednesday to pave the way for early elections after wrapping up a landmark debt swap and eurozone bailout to save the crisis-hit economy.

Papademos will tender his resignation to President Carolos Papoulias who will then dissolve parliament and call for elections within 30 days, a government source said.

The 64-year-old economist, who was appointed prime minister exactly five months ago in a power-sharing deal, is also to make a nationally televised address in the evening, the source added.

Papademos is expected to stay on to supervise the electoral process, along with most of his key ministers.

May 6 is widely seen as the most likely date for the election but the outcome of the vote is uncertain, with anger running deep among Greeks over tough austerity measures that were needed to secure the rescue package.

Papademos, who was vicepresident of the European Central Bank until 2010, was chairing a final cabinet meeting at 1200 GMT before seeing Papoulias at 1400 GMT, his office said.

“The prime minister will submit his mandate and a presidential decree will be issued to dissolve parliament,” the government source said.

Papademos took over in November as head of a coalition backed by the conservative New Democracy party and the socialist Pasok party to complete a debt-saving bond swap with private creditors and ratify a eurozone bailout worth 130 billion euros ($171 billion).

The bailout was ratified by Greek parliament last month and Athens has already arranged to exchange around a third of its near and midterm debt which now exceeds 350 billion euros.

Parliament on Tuesday approved a labour bill restructuring social security funds, the final piece of legislation that Papademos’s government had pledged to pass before the ballot at the behest of Greece’s creditors, the EU and IMF.

“All the conditions are present for elections on May 6,” New Democracy head Antonis Samaras, whose party currently enjoys a narrow lead in opinion polls, told the private Mega television station on Monday.