Moment of truth for Greece: Venizelos

Greek political leaders ignored a final plea from the president to form a coalition government to avert a repeat election, pushing the debt-stricken nation closer to bankruptcy and a possible exit from the eurozone.

Leaders of the three biggest parties met at the presidential mansion for a final attempt to bridge their differences, but the talks quickly hit an impasse as they traded accusations on a deeply unpopular bailout package tied to harsh spending cuts.

Conservative leader Antonis Samaras, who finished first in last week’s election, pinned the blame on the far-left Syriza party, which flatly rules out backing a pro-bailout coalition with Samaras’s New Democracy and Socialist Pasok parties.

“They are not asking for agreement, they are asking us to be their partners in crime and we will not be their accomplices,” said Alexis Tsipras, who has become an overnight sensation since leading Syriza to a surprise second place in the vote.

The other leader at the talks — Socialist leader Evangelos Venizelos — said he was holding on to hopes that a deal could still be salvaged, but warned time was running out. “Despite the impasse at the meeting we had with the president, I hold on to some limited optimism that a government can be formed,” said Venizelos, whose Pasok party finished a humiliating third in the election, a shadow of its former might.

“The moment of truth has come. We either form a government or we go to elections,” he said.

Both New Democracy and Pasok — which have taken turns in ruling Greece for nearly four decades and jointly negotiated a bailout that requires deep cuts in wages, pensions and spending — are eager to avoid facing the voters again.

Polls since the election show the balance of power tipping even further towards opponents of the bailout, who were divided among several small parties but now appear to be rallying behind Tsipras, a 37-year-old ex-Communist student leader.

Tsipras has injected a dose of enthusiasm into the squabbling left and offered hope to millions of austerity -weary Greeks by promising to rip up the bailout deal without abandoning the euro, saying Europe cannot afford to cut Greece loose.

European leaders have retorted the country will not get new loans to stay afloat if it fails to honour its pledges, while banks and some companies like travel operator Kuoni have begun to prepare for a Greek exit from the eurozone.

But Greek voters remain unfazed. Indeed, they are expected to hand Syriza a first-place finish in a new election, winning the party an automatic extra 50 seats at the expense of Samaras.

President Karolos Papoulias’s final hope rests with the small Democratic Left party led by lawyer Fotis Kouvelis, which could provide enough seats to form a government with New Democracy and Pasok. But it says it will not do so unless the coalition also includes Syriza.

Meanwhile, the front page headline of Germany’s most influential magazine Der Spiegel, read: “Acropolis, Adieu! Why Greece must leave the euro,” joining a chorus of voices in Europe’s paymaster country suggesting an exit may now be the best option.

In a sign that Germany is coming to terms with a possible Greek departure, senior players in business and political communities said this week the eurozone could survive without Greece because the bloc is now more resilient to shocks.

But Der Spiegel, one of Germany’s most respected news outlets, went one step further, arguing a Greek exit was the only way forward now. Its front page depicted a splintered euro coin strewn across ancient Greek ruins at dusk.

“Despite all the scepticism, our editors have until now pleaded for Athens to remain in the eurozone,” Der Spiegel wrote in its editorial column. “Since the parliamentary elections at the beginning of May, Spiegel observers have changed their opinion.”

“The Greeks were never ripe for the currency union and they still are not today. The attempt to make the country sustainable healthy through reforms has failed,” Spiegel journalists wrote in their in-depth report.


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