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Europe

Greek president holds last-ditch coalition talks

Latest update : 2012-05-13

Greek President Karolos Papouilas met with his country’s top three political parties for power-sharing talks on Sunday, after they failed to form a government earlier this week. Failing a compromise by Thursday, new elections will be called in June.

AFP - The Greek president on Sunday held last-ditch talks with party leaders in a bid to form an emergency cabinet and avoid new polls that could endanger reforms and push the country out of the eurozone.

Carolos Papoulias met for 90 minutes with the heads of the three parties that topped last Sunday's inconclusive election -- conservative New Democracy, Socialist Pasok, and radical leftist Syriza.

He was to meet with leaders of smaller parties later in the day.

The leaders of the three parties have all failed in their attempts to build a coalition and under Greek law the president must now hold talks to see if one can be formed by Thursday, when parliament convenes, or call new elections in June.

Hopes for a breakthrough are pinned on a small leftist party, Democratic Left, seen as the only one that could possibly join a coalition with Pasok and New Democracy, which in turn is seen as the only plausible cabinet combination after the polls.

But the Democratic Left leader has so far ruled out joining a cabinet without Syriza, which wants to tear up the agreement signed by Greece with the EU and the IMF in 2010 to save itself from bankruptcy.

Before the meeting, Samaras said Greece should aim for a two-year interim coalition government that will keep the country in the euro amid growng threats from Athens' EU peers and creditors.

"The Greek people have given us a mandate to cooperate in order to change policy whilst staying in the euro. A mandate to cooperate for a viable government at least until European parliament elections (in 2014)," Samaras told reporters.

The comments echoed those of Pasok leader Evangelos Venizelos the previous day, who told the president Papoulias that his Socialists, New Democracy and the Democratic Left could form a temporary two-year government to keep Greece in the euro.

The goal would also be to "drastically" improve a multi-billion euro loan deal with the European Union and the International Monetary Fund, he added.

Papoulias on Saturday said there were "grains of optimism" that a coalition between these three parties, which would have 168 deputies in the 300-seat parliament could be formed.

"Things are rather difficult," he told Socialist leader Evangelos Venizelos, noting that Greece needed to be represented at a eurozone finance ministers' meeting on Monday, an EU summit on Friday and a NATO meeting on Sunday.

But Democratic Left leader Fotis Kouvelis poured cold water on such expectations on Sunday, telling Mega television that any unity government should "immediately" cancel legislation that slashed the minimum wage and facilitated layoffs, and start to "disengage" Greece from the unpopular EU-IMF loan agreement.

He added: "I harbour doubts on whether a deal will emerge...I have very little hope."

A new poll published hours before the meetings showed Greeks were desperate for a coalition government that will safeguard eurozone membership.

An overriding 72 percent said parties should cooperate "at all costs" in the Kappa Research poll published in To Vima weekly.

And in response to a separate question, 78.1 percent said the new government should do "whatever it takes" to keep Greece in the euro.

The country's international creditors have warned that no new payments under the latest 130-billion euro ($168-billion) loan will be forthcoming if Greece falters on structural reforms required to put the economy in order after decades of overspending by the state.

A new warning came on Saturday from paymaster Germany, whose central bank chief Jens Weidmann said: "If Athens doesn't keep its word, it will be a democratic choice.

"The consequence will be that the basis for fresh aid will disappear."

Deeply indebted Greece is torn over the tough austerity measures imposed as conditions for EU-IMF bailouts, and the crisis has raised the spectre of it defaulting and even leaving the 17-member eurozone.

Voters last Sunday punished the mainstream parties and left a fractured political landscape amid intense EU pressure over Greek finances.

Pasok and New Democracy pushed through the austerity measures in the previous coalition government but got a combined 149 seats in the 300-member parliament and opinion polls show that the anti-austerity Syriza would come in on top in any new election.

Brussels on Friday revised downwards its economic forecasts for the country at the epicentre of the eurozone debt crisis.

The European Commission said the economy is expected to contract by 4.7 percent this year and see zero growth next year.

Fitch credit rating agency warned that the emergence of a Greek government "unwilling or unable to abide by the terms of the current EU-IMF programme would increase the risk of Greece leaving the eurozone."

Greece has already committed to finding by June another 11.5 billion euros in savings to be made over the next two years. It also needs to redeem 435 million euros in maturing debt on May 15.

Date created : 2012-05-12

  • GREECE

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