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AUDIE CORNISH, host: This is WEEKEND EDITION from NPR News. I'm Audie Cornish.

The leaders of Greece remain deadlocked in their effort to form a coalition government and restore confidence in their debt-ridden nation. The increasingly unpopular Prime Minister George Papandreou has suggested he will step down. But so far, no resignation announcement.

NPR's Sylvia Poggioli has the latest from Athens.

SYLVIA POGGIOLI: Papandreou insists a national unity government would provide broad parliamentary consensus for a crucial $179 billion bailout deal, and a partial write-off of Greece's mountain of debt. The deal would impose more budget cuts on an austerity-weary nation.

But Papandreou warned that if it's not formally approved, Greece's EU partners might doubt the Greek people's desire to remain within the eurozone, and even the European Union.

More immediately, Greece risks not getting a vital $11 billion installment from a first bailout agreed on last year. That could unleash an uncontrolled default next month when the country runs out of cash and further undermine global trust in the whole euro project itself.

Antonis Samaras, leader of the opposition New Democracy Party, said he's determined to help, provided Papandreou resigns. But he didn't say explicitly whether he'll join a unity government.

The conservative daily Kathimerini described the political contest as haggling atop the Titanic.

After two years of dithering and bickering that only worsened the eurozone crisis, European leaders are anxiously tracking developments. The watchwords today are fear of contagion. The next possible domino is Italy, Europe's third largest economy, with a debt that dwarfs that of Greece.

Sylvia Poggioli, NPR News, Athens.

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