Greek Prime Minister George Papandreou and conservative opposition leader Antonis Samaras agreed on Sunday on a new coalition government to approve a euro zone bailout deal before calling elections, the office of the president said.

COMMENTS:

MARC CHANDLER, GLOBAL HEAD OF CURRENCY STRATEGY AT BROWN BROTHERS HARRIMAN IN NEW YORK

The unity government as is suggested...means the European package will be ratified and this is good for the euro on first blush. Problems are already spinning, though, beyond Greece, towards Italy and France. I do not think we get much but a brief reprieve to euro selling.

MICHAEL YOSHIKAMI, PRESIDENT AND CHIEF INVESTMENT STRATEGIST AT YCMNET ADVISORS IN WALNUT CREEK, CALIFORNIA

The resignation of some of the Greek leadership could be seen as a positive for the market. What we had been afraid of was a stalemate. Now it seems the hard cuts will be made. I think equity markets will cheer this, and that it will increase the odds the IMF will provide the next round of bailout funds.

BOB ANDRES, CHIEF INVESTMENT OFFICER, MERION WEALTH PARTNERS LLC, BERWYN, PENNSYLVANIA

The markets don't understand the depth of the problem. These are 'baby steps' that are good on the surface, but cannot lead to a solution that avoids a default.

I would not expect the markets to react much to this news. Papandreou had no option other than to back down. This is basically a vote of no confidence but allows him to fade away more graciously. I don't think it will have a material impact on the final solution.

COSTAS PANAGOPOULOS, HEAD OF ALCO POLLING AGENCY, ATHENS

I'm relieved. It's a very positive development. It was imposed by society and the need to stay in the euro zone, and it will not be overturned.

ELIAS NIKOLAKOPOULOS, POLITICAL SCIENCE PROFESSOR, ATHENS UNIVERSITY

The two leaders had no other choice. If elections were held now, nobody would turn out to vote for them.

New elections will probably be held at the end of February or early March. They have no time to implement the EU bailout deal before then.

ITALO LOMBARDI, LATIN AMERICA ECONOMIST, STANDARD CHARTERED BANK, NEW YORK

It is more uncertainty. There is a lot to be determined here. It means they will have access to the money, which is good news, but at the same time this story never seems to end and I would expect continued volatility in the markets.

JERRY WEBMAN, CHIEF ECONOMIST AND SENIOR INVESTMENT OFFICER WITH OPPENHEIMERFUNDS, NEW YORK

This is what we've been expecting. I'm not sure that there's a big policy change here or that we're sweeping with a new broom. This news suggests there is a significant parliamentary coalition in place to continue supporting the deal. There's some reassurance here that the deal is still active. In the short-term, this vote holds the agreement together, which is what we needed to move forward. But then we come back to whether this deal is sufficient to solve the problem. I think it is a reasonable step in the right direction, but in my opinion the answer is no.

WILLIAM LARKIN, PORTFOLIO MANAGER WITH CABOT MONEY MANAGEMENT IN SALEM, MASSACHUSETTS

I think it is somewhat expected. A lot of people were talking about an unruly default and if they started rationing the funding, that would have been worse. The leadership knew that and so it seems there were some games being played to get to this conclusion.

Greece has this political structure to deal with and that is alarming a lot of investors. For now we don't have to worry about it, but that could last two weeks. There's going to be a lot of political bantering.

There is a lot of posturing there. Similar to what we went through with the debt ceiling. The sound bites might be negative, but the most important part out of this is the reduction of tail risks. We are focussing on the big storm and that is a positive in that it keeps the contagion low and the U.S. economy likely on a slow growth path but still going in the right direction. From a bond perspective that is important because we are getting better but it is very slow.

We could be another quarter or two away from consistently good job growth, which is what the market has really been waiting for. It is just a matter of getting the big geopolitical risks settled.

I would think that it would be seen as a positive from the U.S. stock market point of view and as a slight negative for bonds because the level of geopolitical risk has been slightly diminished.

The yields on U.S. Treasuries are still negative in real terms. That means you need the geopolitical risk to keep them low and we now seem slowly eking our way towards the 2.30 percent range.

ALAN RUSKIN, HEAD OF G10 CURRENCY STRATEGY AT DEUTSCHE BANK IN NEW YORK

It's the best case scenario and may spark a brief relief rally. But it won't last and we will soon go back to focussing on Italy.