Efforts to form a coalition have failed, Greece’s socialist leader and former finance minister said last night.
Evangelos Venizelos, the last of three party leaders to try to reach an agreement, said he would hand the mandate back to the country’s president today.
He was speaking after meeting Radical Left Coalition leader Alexis Tsipras, whose party came second in Sunday’s election.
Tsipras said he would not join any government that intended to continue implementing the terms of Greece’s bailout agreement, which he says are too harsh.
Greece has been in political turmoil since elections on Sunday gave no party enough seats in parliament to form a government.
Voters furious at two years of harsh austerity measures introduced in return for international bailouts rejected Greece’s two formerly dominant parties, the socialist Pasok and the conservative New Democracy, in favour of a myriad of smaller parties on the left and right.
The anti-bailout Radical Left Coalition, or Syriza, led by Tsipras made the most gains, coming in second with 16.8% of the vote and 52 seats in the 300-member parliament, campaigning on a pledge to overturn the austerity measures.
Tsipras again refused to join any coalition government that says it will implement the bailout deal.
“The rejection of this plan does not come from Syriza but was given by the Greek people on the night of the election,” Tsipras said after no solution was reached in his meeting with Venizelos.
“The bailout austerity has already been denounced by the Greek people with its vote, and no government has the right to enforce it.”
The other political leaders insist his policy is irresponsible and will force Greece out of the euro, but also say his party is key to any power-sharing deal after coming second in the election.
The political instability has alarmed Greece’s European creditors and rocked the Athens stock exchange, which closed 4.52% down yesterday, even before news of the failure to reach an agreement broke.
International creditors have warned that the country’s bailout loans and its membership in the 17-nation eurozone could be threatened. German finance minister Wolfgang Schaeuble even suggested the eurozone could deal with an abrupt Greek exit.
“We have learned a lot in the last two years and built in protective mechanisms,” Schaeuble told the Rheinische Post newspaper.
“The risk of effects on other countries in the eurozone have been reduced and the eurozone as a whole has become more resistant.”
Venizelos said he had found common ground in talks with Fotis Kouvelis, head of a small left-wing party, and New Democracy head Antonis Samaras, who won the election with 18.9% of the vote, for a broad coalition that would have a two-year mandate and seek to secure Greece’s participation in the euro.
But hopes that that would work were dealt a blow earlier when Kouvelis said he could not agree to join in a partnership without the support of Tsipras.
Greek president Karolos Papoulias could still manage to break the deadlock, but chances appear slim.
“I hope that during the negotiations chaired by Mr Papoulias everyone will be more mature and responsible in their thinking,” Venizelos said.
Greece has been dependent since May 2010 on rescue loans from the eurozone and the International Monetary Fund. In return, Athens has imposed repeated rounds of spending cuts and tax hikes, leaving the country mired in a fifth year of recession with unemployment above 21%.
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