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Greek coalition talks remain deadlocked
If no deal is reached in next few days, new elections will be called, amid concerns over country's future in eurozone.
Last Modified: 09 May 2012 18:56

Greece's coalition talks have remained deadlocked, with conservative leader Antonis Samaras denouncing calls by the head of the runner-up party to reject the country's international bailout.

Alexis Tsipras, whose Radical Left Coalition came a surprise second in Sunday's election, has been entrusted with seeking partners for a governing coalition after Greeks deserted the two main parties in droves, angry at the pain that harsh austerity cuts have brought.

Tsipras is to meet both Samaras, who heads the conservative New Democracy party that placed first with 18.9 per cent and 108 seats in the 300-member parliament, and the socialist PASOK leader later on Wednesday, as well as other party leaders.

Samaras himself failed to cobble together a coalition on Monday. If Tsipras also fails, the job will move on to former finance minister and PASOK head, Evangelos Venizelos.

Causing consternation

If no deal can be reached in the next few days, new elections will have to be called in the next month. The political uncertainty is causing consternation among Greece's international creditors, who say the country must stick to the cost-cutting terms of its multi-billion bailout.

Greece has promised to pass new austerity measures worth $18.9bn next month and to implement other reforms.


Paul Donovan speaks to Al Jazeera's Counting the Cost  on the future of Greece and the eurozone

These will be reviewed by its creditors, who will then determine whether to release the next batch of bailout funds that keep Greece solvent.

With the Communist Party refusing to join any government and no parties talking to the far-right Golden Dawn, which won 21 seats in parliament, no coalition can be formed without Samaras.

However, the views between him and the radical left remain as wide apart as ever.

Tsipras has called for Greece to pull out of its bailout agreement, saying the election result proves that the austerity deal has lost popular support.

Samaras says such a move would be catastrophic and force Greece out of the 17-nation eurozone.

"Denouncing the agreement, as [Tsipras] proposes, will lead to immediate internal collapse and international bankruptcy, with the inevitable exit from Europe," Samaras said.

"[Amending] the loan deal is one thing, it is a completely different thing to unilaterally denounce it. The second option leads to catastrophe that is certain and immediate."

'Anti-European front'

Samaras urged Tsipras to change his stance by the time the two meet.

GREEK ELECTION RESULTS

300 seats

  KKE (Communist) 26 seats
  Syriza 52 seats
  Democratic Left 19 seats
  Pasok 41 seats
  New Democracy 108 seats
  Independent Greeks 33 seats
  Golden Dawn 21 seats

"If he does not do this, it means that he is trying to build a broad anti-European front and to take us to elections again," Samaras said.

"The Greek people have not given a mandate to destroy the country, nor to leave the euro. Quite the opposite."

Greece has depended on rescue loans from other EU countries and the IMF since May 2010, after decades of profligate state spending and mismanagement sent its debt and deficit spiraling.

In return for two international bailouts worth $312bn, Greece has cut pensions, salaries and state spending and imposed repeated rounds of tax increases.

The reforms have left Greece mired in the fifth year of a deep recession, with unemployment spiraling to above 21 per cent.

In addition, just two months ago, banks and other private creditors wrote off over $130bn in Greek debt, the largest debt writedown in history.

Samaras insists he does not want new elections, and said he was seeking to create a broad center-right front that will ensure the country remains in the euro.

Guido Westerwelle, German foreign minister, said in Brussels on Wednesday that Greece will not receive any further tranches of aid under the planned bailout programme unless it continues with reforms.

"Germany would like to keep Greece in the eurozone but whether Greece actually does remain in the eurozone or not lies in its own hands," he said.

Source:
Al Jazeera and agencies
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