Greece to return to polls after stalemate

Leftist leader Alexis Tsipras gave up his attempt to form a government yesterday, pushing Greece closer to its second election in a few weeks, after voter rejection of an EU/IMF bailout plunged the country into crisis.

Last Sunday’s election, in which voters vented rage against mainstream parties over debt-cutting measures imposed in exchange for the bailout, has caused deep political deadlock and brought European threats to eject Greece from the euro.

European governments kept the country solvent for the moment by agreeing to make a €4.2bn payment today from the region’s bailout fund to enable Athens to meet short-term bond redemptions.

But in a sign of growing displeasure at the impasse in Athens, €1bn was withheld, probably until next month.

Radical Left Coalition leader Tsipras, given the second mandate to try to form a government since the election, gave up last night after both mainstream parties, the conservative New Democracy and socialist PASOK, refused to join an anti-bailout coalition.

The biggest party, New Democracy, had already failed to form a workable coalition and the baton will now pass to PASOK leader Evangelos Venizelos.

If he also fails, elections will be called in three to four weeks in the hope of breaking the deadlock.

“Our proposal enjoyed wide support in society but a weak one in parliament. We won’t be able to realise our dream for a left government,” Tsipras told his parliamentary group, Greece’s second-biggest after the May 6 elections.

Venizelos said he would continue the search for a coalition when his turn comes but there seems little space for compromise between pro- and anti-bailout forces, almost equally balanced in parliament.

“We must form a government and give the country prospects for the future, hope, and security,” he said.

The latest European leader to warn Greece of the dangers of being forced out of the euro, ECB policymaker Ewald Nowotny, said Greece could not be helped if it would not help itself.

New Democracy and PASOK, which ruled Greece for decades, were ravaged in the poll, receiving less than a third of votes and falling two seats short of a parliamentary majority.

Venizelos is expected to get a three-day mandate today but the political impasse is so intractable that neither Samaras nor Tsipras used up the full time.

Angela Merkel, the German chancellor, said in a newspaper interview that she wanted Greece to stay in the euro but it must stick to the terms of the bailout.

Polls show a vast majority of Greeks want to keep the euro — widely seen as impossible without the bailout.


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