Fresh Attempt To Halt Greek Political Crisis
Facing mounting market pressure, Greece has taken a fresh stab at ending its lingering political crisis after the leader of a far-left party that wants to tear up the country's bailout agreements pulled out of talks to form a coalition.
The breakdown inches the cash-strapped country closer to a repeat election next month.
It also punctuates growing fears that the political stalemate stifling Greece since the inconclusive May 6 polls, could precipitate the debt-laden country's exit from the euro.
Resisting repeated appeals by President Karolos Papoulias, Alexis Tsipras, the young, leader of the far-left Syriza group walked out of the crucial coalition talks on Sunday.
He also snubbed a follow-up invitation by the country's top citizen to return to the negotiating table on Monday.
"They don't want a coalition partner," the Syriza leader said after his pull out.
"They want a left alibi for a government set on pursuing austerity. We won't become accomplices to such a crime."
President Papoulias is now trying stitch together a power-sharing deal between a moderate leftist leader, Fotis Kouvelis of the Democratic Left, and the leaders of the conservative New Democracy and socialist Pasok parties.
The talks have ended for the day and will resume on Tuesday.
The latter two parties were the once-dominant political forces in Greece that took a brutal beating in the May 6 polls because of their support for strict fiscal austerity.
Banded together, the three parties could secure 168 seats in the country's 300-member parliament.
But pundits and even politicians within those groupings question whether the coalition would be strong enough to push through added austerity measures, expected as early as June.
Should the president fail to broker an agreement, a repeat election will be held as soon as June 17.
But even then, Greece may be far from clear of further political chaos.
While 77% of Greeks support the country staying in the shared European currency, seven in 10 voters cast their ballots in favour of small, fringe anti-austerity groups, with Syriza mopping up most of the protest vote.
A flurry of polls published over the week showed Syriza was set to increase its support base, making it the country's biggest party with about 20% to 25% of the vote, far short of the 36% it needs to secure a parliamentary majority.
Financial markets are concerned and Greece's European lenders are running out of patience.
For the first time since the Greek crisis set in three years ago, European central banks have begun publicly talking about managing Greece's exit from the euro and a break-up of the 17-nation shared currency zone.
"I guess an amicable divorce - if that was ever needed - would be possible, but I would still regret it," Luc Coene, central bank governor of Belgium, told the Financial Times.
Patrick Honohan, Irish central bank governor, told a conference in Estonia at the weekend: "Things can happen that are not imagined in the treaties...
"Technically, it (a Greek exit) can be managed... It is not necessarily fatal, but it is not attractive."
what do you think?
The European Dream is becoming a Nightmare. On the 27th May someone said the World will be plunged into chaos. Let's see how the money markets will react and respond.
It is indeed a nightmare, but I don't understand the reference to 27 May.
Well, it looks as if the big danger is that Greece will become a Communist country. A serious financial crisis such as this breeds great discontent as occurred in Germany in the early 1930s. A controlled and planned withdrawal of Greece from the Eurozone is the only hope, and a similar solution is needed for Spain and Italy, and perhaps Portugal, Ireland and the Netherlands, but I can't see Germany accepting this as once these countries are outside the Euro, German goods will no longer be competitive in their markets.
A devalued currency and cheap exports is the way forward for Greece. Also great deals for tourists would boost the economy. The Greek people must stop dreaming of the euro "credit card" it had before. You want the euro you will have to pay. The way forward is to get out of the eurozone