Greek elections loom after leftist leader rejects coalition talks

Reuters , Monday 14 May 2012

Greece's president final bid to cobble together a coalition with party leaders fails and the talks hit an impasse because of deep splits over an EU/IMF rescue plan; a repeat election is possible

Protesters run from police after hurling petrol bombs during violent anti-austerity demonstration in central Athens, on February 12, 2012. (File Photo: Reuters)

Greece's radical leftist leader spurned an invitation from the president for a final round of coalition talks on Monday, all but ensuring a new election that he is poised to win.

Greece's political landscape has been in disarray for a week since an inconclusive election left parliament divided between supporters and opponents of the 130 billion euro ($168.3 billion) EU/IMF bailout, with neither side able to form a government.

Government officials have warned that Greece could run out of cash as early as the end of June if it does not have a government in place to negotiate the next aid tranche with its lenders.

"The country is up in the air," financial daily Imerisia wrote on its front page, warning in an editorial: "The country is moving to the brink of collapse and hopes for restoring the political stability are fading away."

President Karolos Papoulias must call a new election if he cannot persuade leaders to compromise. After a day of fruitless negotiations on Sunday, he invited politicians from the biggest three parties to return to the presidential mansion at 1630 GMT on Monday, along with a small leftist group.

But an official from the second biggest party, the radical leftist SYRIZA, said its 37-year-old leader Alexis Tsipras would not attend.

The anti-bailout vote was divided among small parties but has now rallied behind Tsipras. Polls show he would now place first if the vote is repeated, a prize that comes with a bonus of 50 extra seats in the 300-seat parliament.

Tsipras has consistently refused to join a coalition government with the establishment conservative and socialist parties that ruled Greece for decades, but were punished by voters last week for their role in agreeing the EU rescue, which requires deep cuts in wages and pensions.

Tsipras says he wants to keep Greece in the euro but the bailout deal must be torn up, a position shared by an overwhelming majority of Greeks but regarded by many in Brussels as untenable. European leaders say tearing up the bailout would require them to cut off funding, allow Greece to go bankrupt and eject it from the European single currency.

"SYRIZA has paved the way for new elections. And this time, whether we like or not, they will be more like a referendum. We will have set ourselves the question whether we prefer the euro or the drachma," centre-left daily Ethnos wrote in an editorial.

European officials who once refused to discuss the possibility of Greece's exit from the euro now talk about it openly as a real, if painful, possibility.

"Divorce is never smooth," European Central Bank policymaker Luc Coene told the Financial Times. "I guess an amicable divorce - if that was ever needed - would be possible, but I would still regret it."

"Partners in crime"

After meeting with Papoulias and the conservative and socialist leaders, Tsipras said of their coalition offer: "They are not asking for agreement, they are asking us to be their partners in crime and we will not be their accomplices".

Socialist leader Evangelos Venizelos said he was nonetheless holding on to hopes that a deal could still be salvaged, but warned time was running out.

"The moment of truth has come. We either form a government or we go to elections," said Venizelos, whose PASOK party finished a humiliating third in the election, a shadow of its former might.

The leader of the smaller, moderate Democratic Left party, Fotis Kouvelis, will attend Monday's talks, his party said. He commands enough seats to provide the conservatives and socialists with a majority, but has repeatedly said he would not join a coalition without Tsipras.

"A government that does not ensure the participation of the second party will not have the necessary popular and parliamentary support," Kouvelis told Antenna TV on Monday.

All seven political parties that won seats in last week's election were given audiences with the president on Sunday, demonstrating the radical transformation that has taken place in just a week after generations of stable two-party rule.

Among parties Papoulias was obliged to meet was the far right Golden Dawn, in parliament for the first time. Many Greeks watched in shock as the president, a revered 82-year-old veteran of the World War II anti-Nazi resistance, received the leader of a group whose members give Nazi-style salutes.

Papoulias, shown on TV smiling with other leaders, was stony faced when seated opposite Golden Dawn's Nikalaos Mihaloliakos. Journalists at the mansion sat on the ground in protest when Mihaloliakos entered and refused to ask questions when he left.

Supporters of the two establishment parties will be hoping that if a new election is held, Greeks will be frightened of the prospect of leaving the euro and return to the fold.

As many as 78.1 percent want the new government to do whatever it takes to keep their country in the currency, a poll by Kappa Research for To Vima daily showed.

But Europe is running out of patience. The front page of Germany's influential Der Spiegel magazine headlined: "Acropolis, Adieu! Why Greece must leave the euro."

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