Greek coalition in serious doubt

Associated Press
Greek President Karolos Papoulias, center, Socialist leader Evangelos Venizelos, from left, Conservative leader Antonis Samaras and Leftist leader Alexis Tsipras meet at the presidential palace in Athens, Sunday, May 13, 2012. Greek President Karolos Papoulias has called the leaders of Greece's political parties to meetings on Sunday, in a last-ditch effort to broker a deal for a coalition government. (AP Photo/Kostas Tsironis)
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ATHENS, Greece (AP) — Talks to form a governing coalition in crisis-struck Greece are planned Monday but the chances of success have been diminished after one leftist party pulled out of the talks, leading the country one step closer to new elections — and bringing its continued membership in the euro into serious doubt.

Last-ditch efforts by President Karolos Papoulias to broker a deal between wrangling party leaders ended with no deal in sight late Sunday, a week after national elections produced a deadlock, with no party winning enough seats to form a government.

The Radical Left Coalition (Syriza) party, which came in a surprising second in the May 6 second, with 16.8 percent, announced around midnight Sunday it would refuse to join a coalition government.

"Syriza refuses to be a left-wing alibi for a government that will continue the policies the people rejected on May 6," NET state television quoted Syriza leader Alexis Tsipras as saying.

That leaves conservative New Democracy, which won the election with 18.9 percent, socialist PASOK, which came in third with 13.2 percent, and Democratic Left, the most moderate of the leftist parties, seventh with 6.1 percent, as the only remaining partners available for a coalition government. President Papoulias has not invited again fourth-placed Independent Greeks — a right-wing nationalist offshoot of New Democracy — the fifth-placed hardline Communists and sixth-placed extreme-right Golden Dawn to attend tomorrow evening's talks, as none expressed any desire to take part.

In theory, New Democracy, PASOK and the Democratic Left could form a stable coalition government. Together, they hold 168 seats in the 300-seat Parliament, despite winning 38.2 percent of the votes among them. That's because the electoral law gives the winner a bonus of 50 seats, whatever its winning margin. All three have declared, and continued to do Sunday, that they would refuse to join a broad coalition government without Syriza, because they want this leftist upstart to share joint responsibility in the government and not benefit from leading the opposition. But despite pressure to join and prove he means what he says when he declares himself in favor of remaining in the euro, Tsipras resisted the pressure of conservative leader Antonis Samaras and socialist Evangelos Venizelos to join.

Despite Tsipras' refusal, all three spokesmen for New Democracy, PASOK and the Democratic Left, when contacted by the Associated Press, said their parties would attend the talks with the country's President, scheduled to start at 7.30 p.m. local (1630 GMT, 1230 EDT).

Voters furious at the handling of Greece's financial crisis and two years of harsh austerity measures taken in return for the bailout loans punished the formerly dominant PASOK and New Democracy, which saw their support crumble to historic lows. Syriza made big gains, more than tripling its popularity after campaigning on an anti-bailout platform. Polls published Last week show Syriza winning a likely new election, although far from gaining an overall majority in Parliament. The latest poll, published in Sunday newspaper To Vima, showed Syriza ahead with 20.5 percent of the vote, ahead of New Democracy's 18.1 percent and the socialists' 12.2 percent. The Democratic Left, still in seventh place, gets 5 percent.

In the same poll, though, 78.1 percent of respondents say the new government must do "whatever's necessary" to keep Greece in the euro, something that would be nearly impossible if Greece were to denounce the bailout agreements, as Syriza, and other parties, want. It looks as if the Greek electoral wants to stay in the euro but without the commitments contained in the international bailout agreement, which has given the country billions in rescue loans.

In return for €240 billion ($310 billion) in rescue loans from the European Union and International Monetary Fund, Greece has imposed severe spending cuts, including slashing pensions and salaries in the public sector, and repeated rounds of tax hikes. The austerity has left Greece mired in a fifth year of deep recession, with unemployment spiraling above 21 percent.

Fotis Kouvelis, the Democratic Left leader, who has attacked Syriza — a party which he himself abandoned two years ago — for being at best half-hearted and at worst hypocritical about its commitment to Europe, insists Greece can negotiate its way to a "disengagement" from the bailout agreement's commitments. He has called for a repeal of the laws cutting the minimum wage and restricting collective wage bargaining. Conservative leader Samaras has long promised a "renegotiation" of the terms. And Venizelos, whose socialists signed the first bailout deal in May 2010, has promised to "get out" of the agreement's restrictive measures, through fast reforms, by 2015 at the latest.

So far, European leaders have been firm in calling for Greece to stick to its commitments, or face the consequences. At most, they would be prepared to support pro-growth measures, although not the kind of debt-loading, consumption-driven growth that was Greece's — and several other European countries' — hallmark in the decade prior to 2008. Thus, the new government will have little room for maneuver if it wants to stick to Eurozone membership.

But with the mood angry after years of sacrifices, with no end yet in sight, the effectiveness of the government will be severely tested. And mutinous civil servants, many of whom abandoned their favored socialists in the last election to switch to Syriza, may undermine the urgently needed state sector reforms.

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