Debt-ridden Greece moved closer Tuesday to forming a coalition government, with economist Lucas Papademos the likely choice as interim prime minister.

Current socialist Prime Minister George Papandreou demanded the resignations of his Cabinet in advance of an agreement with opposition leader Antonis Samaras on a new government to serve until national elections can be held early next year.

Papademos, a former vice president of the European Central Bank, is viewed as a technocrat, and a non-partisan personality who can carry out the austerity measures that international creditors are demanding from Greece.

The European debt crisis also took center stage in Rome. Italian Prime Minister Silvio Berlusconi, with a narrow hold on power, faced a key vote Tuesday in parliament that could topple his government as it struggled to impose spending cuts and control the country’s $2.6 trillion debt. European leaders are worried that Italy, with Europe’s third largest economy, could be the next country to need an international bailout but that the size of the financial assistance could be too big for the European Union to handle.

Mr. Berlusconi’s chief coalition ally, Northern League leader Umberto Bossi, called on the Italian leader to resign ahead of the vote on a budget issue.

Greek leaders seemed confident that a new government would be formed shortly, with the country’s tourism minister, George Nikitiadis, suggesting the new prime minister would be named by Tuesday night.

European finance ministers are awaiting the formation of the new government in Greece before deciding whether to hand the country another segment of its first bailout in 2010.

The finance ministers met late Monday in Brussels to consider the $11 billion Greek funding. The ministers have decided to wait for a resolution between Mr. Papandreou and Samaras on the make-up of the interim government and a commitment to the bailout agreement.

Mr. Papandreou is stepping down in favor of a short-term coalition government after abandoning his call a week ago for a referendum on the European Union debt-relief plan to help solve Greece’s financial woes. In Washington, the White House on Monday said it welcomed the Greek consensus on creating a new government and urged that it quickly implement financial reforms.