Greeks stuck in political impasse, no new govt yet

ATHENS, Greece (AP) — Talks on forming a new Greek government deadlocked Wednesday, with conservative leader Antonis Samaras denouncing a radical leftist leader's call to reject the country's international bailout.

Alexis Tsipras, whose Radical Left Coalition (Syriza) party came a surprise second in Sunday's election, is seeking partners for a governing coalition after voters deserted the two main parties in droves, angry at the pain that harsh austerity cuts have brought.

Tsipras on Wednesday was meeting with other party leaders including Samaras — who heads the conservative New Democracy party that placed first with 18.9 percent and 108 seats in the 300-member parliament, and the socialist PASOK leader Evangelos Venizelos.

Samaras himself failed to hammer out a coalition on Monday. If Tsipras also fails, the mandate will go to Venizelos, the former finance minister whose formerly dominant socialist PASOK party plunged to third place with a meager 13.9 percent and 41 seats.

If no deal can be reached in the next few days, new elections will be called for June.

The political uncertainty is causing consternation among Greece's international creditors, who say the country must stick to the cost-cutting terms of its multibillion bailout.

Athens has promised to pass new austerity measures worth €14.5 billion ($18.9 billion) next month and to implement other reforms. These will be reviewed by its creditors, who will then determine whether to continue releasing rescue loans that are keeping Greece solvent.

With the Communist Party refusing to join any government and no parties talking to the extreme right Golden Dawn, which won 21 seats in Parliament, no coalition can be formed without Samaras. But the views between him and the radical left remain as wide apart as ever.

Tsipras has called for Greece to pull out of its bailout agreements, saying voters have rejected lawmakers who supported the bailouts. Samaras says such a move would be catastrophic and force Greece out of the 17-nation eurozone.

"Denouncing the agreement, as (Tsipras) proposes, will lead to immediate internal collapse and international bankruptcy, with the inevitable exit from Europe," Samaras said. Agreeing to amend the deal "is one thing, it is a completely different thing to unilaterally denounce it. The second option leads to catastrophe that is certain and immediate."

Samaras urged Tsipras to change his stance.

"If he does not do this, it means that he is trying to build a broad anti-European front and to take us to elections again," Samaras said. "The Greek people have not given a mandate to destroy the country, nor to leave the euro. Quite the opposite."

Panos Kammenos, head of the right-wing Independent Greeks party that won 33 seats, said after meeting with Tsipras that there was not enough support to form an anti-bailout government.

Greece has depended on rescue loans from other European Union countries and the International Monetary Fund since May 2010, after decades of profligate spending and mismanagement sent its debt and deficit spiraling.

In return for two bailouts worth €240 billion ($312 billion), Greece has slashed pensions, salaries and state spending and imposed repeated rounds of tax hikes. The reforms have left Greece mired in the fifth year of a deep recession, with unemployment spiraling to above 21 percent.

The country also saw its debt slashed by about €100 billion ($130 billion) in a bond swap with private creditors that was the largest debt writedown in history.

Samaras insists he does not want new elections, and said he was seeking to create a broad center-right front that will ensure the country remains in the euro.

One potential coalition solution could be a partnership between New Democracy, PASOK and the small Democratic Left party of Fotis Kouvelis. With its 19 seats and 6.11 percent of the vote, the Democratic Left is emerging as a potential kingmaker.

"The situation in Greece is very crucial and I think that political parties should use all means to avoid new elections," Democratic Left spokesman Gerasimos Georgatos told the Associated Press.

While his party says deadlines in the rescue loan agreement should be extended and some terms renegotiated, Georgatos said it was not possible for Greece to pull out of the deal altogether.

"Under no circumstances can we talk about repudiating and abolishing the agreement and writing off the debts as Mr. Tsipras and Syriza often say, because that automatically means bankruptcy and Greece exiting the euro — which we totally oppose," he said. "We want Greece to remain in Europe and the euro."

Greek shares were flat Wednesday, with the Athens Stock Exchange index closing down 0.87 percent after two days of big losses that sent it down to its lowest level for nearly 20 years.

The political uncertainty is also causing concern among ordinary Greeks.

"We are not happy with the results, because the chaos that there is at the moment in politics is also simultaneously in the country's economy," said Klea Vakifli, who runs a coffee shop near the Finance Ministry in central Athens.

Greece's financial crisis has hit her business hard, reducing the 30 employees of two years ago to 20 now.

"(Business) is falling and falling and falling," she said. "Although ... our products are very good and special, it seems people can't do it, they can't pay."

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Nicholas Paphitis in Athens contributed.