Greeks attempt third coalition deal under Evangelos Venizelos amid bankruptcy fears

 

Thursday 10 May 2012 17:56 BST
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Socialist leader Evangelos Venizelos meets President Karolos Papoulias
Socialist leader Evangelos Venizelos meets President Karolos Papoulias

Greek power-sharing talks entered a third and final round today, as parties in the crisis-hit country struggled to hammer out a coalition deal after general elections produced no outright winner.

The mandate to seek coalition partners passed to Socialist leader Evangelos Venizelos, whose traditionally dominant PASOK party was hammered in Sunday's poll, pushed into third place with just 13.2% of the vote.

He is the third party leader to try to find an agreement.

Antonis Samaras, whose conservative New Democracy won the most votes, and runner-up Alexis Tsipras, who heads the Radical Left Coalition, or Syriza, have already tried and failed.

A major stumbling block has been Tsipras' insistence that Greece's tough austerity programme, which is part of its international bailout commitments, be cancelled or frozen. Both Samaras and Venizelos argue such a move would be catastrophic for the country, and would lead Greece out of the euro.

Venizelos has three days in which to seek some form of agreement, although since all the party leaders have already met during the previous two rounds, that looks unlikely.

"Things are not easy," he said. "I am not declaring myself optimistic. But I am declaring myself responsible, and dedicated to this aim that I believe serves the national interest."

If his efforts fail, President Karolos Papoulias will convene all the leaders in a last-ditch attempt to cobble together a coalition. If that is also unsuccessful, new elections will be called for early June, prolonging the political uncertainty.

Speaking earlier in parliament, Venizelos said he believed an agreement was possible.

"If the parties show a minimum level of responsibility, we believe this parliament can produce a government that is viable, responsible and one that can do something better for this country," he said.

Venizelos, however, sharply criticised a proposal by Syriza to impose a moratorium on debt payments.

"This would lead the country to formal bankruptcy, cutting it off the international banking system, and world markets, halting imports and exports and lines of credit to businesses. Greece would become Albania of the 1960s."

Markets, in the doldrums since Greece's election stalemate, partially rebounded, with shares on the Athens Stock Exchange up 2.15% at 628.64 in early afternoon trading.

But new unemployment figures showed the jobless rate reaching 21.7% in February, after more than 900 people lost their jobs every day on average in the previous 12 months.

In return for billions of euros in rescue loans from other European Union countries and the International Monetary Fund, Greece imposed harsh austerity measures that saw salaries and pensions slashed, tens of thousands of people lose their jobs and businesses close down.

Anger at the past two years of austerity and the deep financial crisis saw voters desert the formerly dominant two main parties and flock to smaller parties on the right and left. Syriza saw a strong boost, bringing the party into second place with 16.8 %.

"The people have punished PASOK, because they considered it responsible for the crisis," Venizelos said.

But, Venizelos said the election result was a clear message that the Greek people rejected the dominance of any one party.

"It is clear from the result that the people want a coalition government, handing no clear mandate to any single party," Venizelos told his party's deputies. "The Greek people want to remain in the euro."

AP

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