Greece in limbo as attempt to form government fails

A first attempt to form a new Greek government collapsed in less than a day yesterday after an election which left gaping questions over the country’s ability to avert bankruptcy and stay in the euro.

Greeks — enraged by the terms of international bail- outs which have cut wages, sent unemployment to one of the highest levels in Europe and caused a spate of suicides — deserted mainstream parties in droves in Sunday’s poll.

Antonis Samaras, leader of the conservative New Democracy party which won the biggest share of the vote, gave up trying to form a government last night within hours of getting a mandate from President Karolos Papoulias.

His efforts were rebuffed by a string of anti-bailout parties who had benefited from the electoral earthquake which sent tremors across the eurozone.

“It was impossible,” Samaras told reporters. “I handed back the mandate.”

The task will now pass to Left Coalition leader Alexis Tsipras, who was catapulted into second place in Sunday’s vote on the back of voter anger over the economic hardship.

Finance ministry officials said Greece could run out of cash by the end of June if there was no government to negotiate a new aid tranche with the EU and IMF.

Both ruling parties, New Democracy and Socialist PASOK were devastated by the election, winning too few seats to form a new government.

Earlier, Tsipras scathingly rejected the offer of joining a unity government with Samaras. “We’re not going to let in through the window what Greek people kicked out the door,” he said adding that the bailout “did not bring salvation but caused tragedy”.

Tsipras said he would try to create a leftist government, although he appears not to have the numbers. He will receive a three-day mandate today.

PASOK will get a turn if Tsipras fails, but new elections will have to be called within weeks if no government is cobbled together.

PASOK was pushed into third place in the election, dropping from 44% in the last poll in 2009 to a humiliating 13%.

The election result rattled investors, sending the euro to a three-month low and safe haven German government bond futures to record highs, although the index of top eurozone shares reversed early losses to head into positive territory, suggesting alarm about Greece’s ability to harm the wider eurozone was muted.

Fotis Kouvelis, leader of the moderate Democratic Left party said earlier he would only co-operate with left-wing groups.

Another group, the conservative splinter party Independent Greeks, refused to enter talks with Samaras.

PASOK leader Evangelos Venizelos, who arranged Greece’s second €130bn bailout, said it should be renegotiated to lessen the burden on Greeks by spreading the cuts demanded under the package over three years instead of two.

In the face of what looks like an intractable impasse, another election in a few weeks could be the only way out, deepening doubts about Greece’s future.

“Country in Limbo” said a headline in the Imerisia newspaper. “Nightmare of Ungovernability” said Ta Nea daily.


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