Greeks try anew to form coalition
President urges parties to unite
ATHENS, Greece — Greece’s president will meet with political party leaders today in a last-ditch effort to broker a deal for a coalition government and avoid another general election.
Karolos Papoulias took the step Saturday after socialist leader Evangelos Venizelos officially gave up the mandate to form a coalition government after three rounds of negotiations proved fruitless.
Papoulias’ office announced that the president would meet initially with the heads of the three parties that won the most votes in last Sunday’s inconclusive elections: the conservative New Democracy party; the Radical Left Coalition, or Syriza; and socialist Pasok, each of which failed to deliver on mandates to form governments in the past week.
He will then meet individually with the leaders of the other four parties that won enough votes for parliamentary seats, with the aim of forming a national-unity government: the nationalist Independent Greeks, the Communists, the rightist Golden Dawn and the moderate-left Democratic Left. The Greek Constitution requires that the president hold such meetings, according to a statement e-mailed from Papoulias’ office.
The format was designed
to draw everyone to the table, as Alexis Tsipras, the leader of the biggest anti-bailout party, Syriza, had threatened to boycott the talks rather than sit at the same table with Golden Dawn leader Nikos Michaloliakos.
Under Greece’s election system, the president gives each of the three top votewinning parties a mandate to form a government that can last for as many as three days. If the process still fails to yield a coalition, the president must try to broker a government of national unity, the constitution says. If that fails, new elections are held.
Whether Greece should adhere to the strict austerity measures required for the bailout loans or pull out of the deal has been at the heart of the wrangling over creating a coalition government.
Venizelos, the Pasok leader, returned the third and final mandate to form a government to Papoulias at a meeting Friday in Athens, after Tsipras turned down an appeal to join a coalition.
Syriza’s refusal to take part meant that it wasn’t possible to form an administration, Venizelos told Papoulias in comments broadcast live on state-run NET TV. Pasok, New Democracy and the Democratic Left party of Fotis Kouvelis had earlier agreed on a coalition, with the Democratic Left insisting on Syriza participation, given its strong performance in the elections.
Tsipras declined to participate in a government that would group two parties in favor of the bailout by the International Monetary Fund and European Union. He argues the bailout terms are so onerous that they are giving the country’s battered economy, which has undergone two years of austerity measures in return for international bailouts worth $310 billion, no chance of recovery.
But both Venizelos and Antonis Samaras, head of New Democracy, have slammed Tsipras’ position as irresponsible. They say his policies would lead to disaster and force Greece out of the European Union’s joint currency, the euro.
Tsipras had demanded that Samaras and Venizelos, the former finance minister, send a letter to the EU re- voking their written pledges to implement austerity measures. Both rejected the request, with Samaras saying he was being asked “to put my signature to the destruction of Greece.”
Handing back the mandate to the president, Venizelos said that, while there had been a meeting of minds among his party, Democratic Left and New Democracy, Tsipras was sticking to his position. STAY WITH EURO, 78% SAY
Still, 78 percent of Greeks want any new government to do whatever possible to keep Greece in the euro area, while 72 percent said Greece’s political parties should make concessions so that a coalition government can be formed, compared with 22.9 percent who prefer new elections to be held, according to a Kapa Research poll for To Vima newspaper published Saturday. Kapa surveyed 1,007 Greeks on Wednesday and Thursday. The poll had a margin of error of plus or minus 3.1 percentage points.
Kouvelis, whose party holds 19 seats in the 300-seat parliament, said the unity government would last until 2014 and have a specific agenda to negotiate a gradual “disengagement” from bailout austerity measures.
“Unfortunately, I see a one-way street to elections,” Kouvelis said in an interview on NET on Friday after Tsipras rejected the proposal.
New Democracy and Pasok, the two parties that supported the international rescue in an interim government earlier this year, are two deputies short of the 151 seats needed for a majority in the 300-seat chamber. Syriza came second with 52 seats, and Pasok placed third with 41 seats. Five parties opposed to the bailout conditions are now in parliament.
Kouvelis said Syriza’s insistence on canceling the bailout agreement “constitutes a break with the euro.” TROUBLE WITH CREDITORS
The turmoil has alarmed Greece’s international creditors, who have stressed that the country must stick to the terms of its rescue deals if it hopes to continue receiving the funds that have been keeping it afloat since May 2010.
The risk of Greece leaving the euro by the end of 2013 has risen to as high as 75 percent, Citigroup Inc. said Monday. More than half of investors predict a nation will exit this year as Greece’s election impasse threatens to push the debt crisis to new depths, according to a Bloomberg Global Poll.
Klaus Regling, chief executive officer of the European Financial Stability Facility, the bailout fund, said an exit would be the costliest option.
The “worst-case scenario” of Greece leaving the euro “would be the most expensive solution for all parties involved,” Regling told the Vienna-based Die Presse newspaper. “That’s why the governments of the euro area are doing everything for Greece to stay.”
Greece will run out of cash by early July if partners decided to withhold their next aid payment. The European Financial Stability Facility on Wednesday confirmed that a $8.4 billion payment will be released by the end of June, with $5.4 billion having been disbursed Thursday. A remaining $1.3 billion will be released depending on Greece’s financing needs.
Under the terms of the bailout, a new government will need to detail savings of $14.2 billion next month.
In theory, the president’s talks with the party leaders could drag until the scheduled date for the opening of the new parliament, on Thursday. In practice, precedent shows that talks could take two or three days, said George Katrougalos, a professor of constitutional law. It is also possible that an impasse could be reached today.
If Papoulias fails to broker a coalition agreement, Greece will have to hold new elections next month, most likely June 10 or June 17, prolonging the political uncertainty and calling Greece’s euro membership into question.