Greek runner-up rejects coalition deal

Greek runner-up rejects coalition deal

The leader of the runner-up party in Greece’s national election, the Radical Left Coalition’s Alexis Tsipras, has rejected a coalition with the winning conservative party.

Following 40-minute talks with conservative leader Antonis Samaras, Mr Tsipras said the two parties’ views were diametrically opposed. He demanded the cancellation of austerity measures many blame for deepening economic woes.

Mr Samaras, who was given three days from today in which to build a coalition or pass on the mandate to Mr Tsipras, was also meeting with the head of the third party, the socialist PASOK.

Mr Tsipras’ refusal to co-operate with the conservatives, while anticipated, makes it even less likely that Mr Samaras will be able to form a strong enough coalition. It also increases the possibility that Greece will be forced to hold repeat elections in mid-June.

``The campaign positions of Mr Samaras are at the opposite end of the alternative proposals of a left-wing government,'' said Mr Tsipras, who strongly opposes Greece's bailout commitments.

“There can be no government of national salvation, as (Samaras) has named it, because his signatures and commitments to the loan agreement do not constitute salvation but a tragedy for the people and the country.”

Another election, possibly as soon as next month, looms for a country that is reliant on international support to avoid bankruptcy.

Yesterday’s vote saw parties backing the draconian international rescue package lose their majority in parliament – raising the chances of a possible Greek exit from the common euro currency.

The uncertainty weighed on markets across Europe, with the Athens exchange closing 6.7 % down.

Official results showed conservative New Democracy came first with 18.85% and 108 of

Parliament’s 300 seats. Mr Samaras, who backs Greece’s bailout commitments for austerity but has called for some changes to the bailout plan, will launch coalition-forming talks later in the day.

“I understand the rage of the people, but our party will not leave Greece ungoverned,” Mr Samaras said.

But even with the support of the only other clearly pro-bailout party elected, Socialist PASOK, New Democracy would fall two seats short of a governing majority.

If the deadlock does not ease, Greece faces new elections under a caretaker government in mid-June, about the time it has to detail new drastic austerity measures worth €14.5bn for 2013-14.

In June, Athens is also due to receive a €30bn instalment of its rescue loans from the other countries in the 17-strong eurozone and the International Monetary Fund. If aid is cut off, analysts at Commerzbank estimated the country would have trouble paying its debts by autumn.

German Chancellor Angela Merkel said Athens would still be expected to live up to its agreements.

“Of course the most important thing is that the programmes we agreed with Greece are continued,” she said.

Her remarks were echoed by a European Commission spokesman, Amadeu Altafaj Tardio, who stressed the need for “full and timely implementation” of Greece’s agreement with its international creditors and underlined that “solidarity is a two-way street”.

Analyst Vangelis Agapitos said protracted instability would threaten the country’s eurozone membership. Greece’s debt inspectors – the eurozone, IMF and European Central Bank, collectively known as the troika – could turn the screws by halting release of the bailout funds until Athens moves forward with its pledged reforms.

“Europe can live without Greece but I don’t think Greece can live without Europe,” he said. “If the troika is bluffing, Greece will remain in the euro. But if the troika says: ’I can negotiate, but first show me some progress,’ Greece has no progress to display right now.”

“If the troika rattles our bars, then either the people will come to their senses at the next elections or the country will enter an alternative course, and when we open that door we will see what kind of chaos – or paradise – lies behind,” Mr Agapitos said.

Yesterday’s big winner was Mr Tsipras’ party, whose unprecedented second place with 16.78% gives it 52 seats.

Disaffected voters deserted PASOK and New Democracy, the two mainstays of Greek politics, leaving them at their worst level since 1974, when Greece emerged from a seven-year dictatorship.

Instead, strong gains were registered by smaller parties, including the extremist Golden Dawn, which rejects the neo-Nazi label and insists it is nationalist and patriotic.

Golden Dawn has been blamed for violent attacks on immigrants and ran on an anti-immigrant platform, vowing to “clean up” Greece and calling for land mines to be planted along the borders. It got 6.97% of the vote – a stunning improvement from 0.29% in 2009 – and won 21 seats.

The election was Greeks’ moment to vent their fury over two years of austerity that Athens has been pushing through to qualify for bailout loans. Incomes, benefits and pensions have been slashed repeatedly and taxes hiked. Unemployment has soared to a record of over 21%.

PASOK, which has spent 21 years in government since 1981 and stormed to victory with more than 43% in 2009, saw its support slashed to 13.18%.

Mr Samaras also held talks with Evangelos Venizelos, the leader of PASOK. Both Mr Samaras and Mr Venizelos have indicated any unity government would have to include more than just their two parties.

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