A third Greek leader tries to put together a government

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ATHENS -- Facing mounting international pressure, political leaders here took another stab at forming a coalition government Thursday as Greece’s anxious creditors began turning off the tap of rescue loans keeping this cash-strapped country afloat.

Evangelos Venizelos, the newly installed leader of the socialist PASOK party, entered talks with his conservative and far-left counterparts in hopes of patching together a power-sharing deal that could contain the fallout of a lingering political crisis.

The prospect of a breakthrough, however, looked bleak. Venizelos, a former finance minister, is the third political leader to try to stitch together a coalition since Sunday’s election; his conservative and far-left rivals already failed in similar bids.

Venizelos, the chief architect of Greece’s austerity program, suffered a crushing defeat at the polls, ending PASOK’s dominant role in domestic politics after nearly three decades. The highly fractured electoral result has plunged Greece into political turmoil, leaving the crisis-hit country without a government after no party managed to clinch an outright majority in the 300-seat parliament.

A surge in anti-austerity sentiment fanned strong support for fringe parties, including Alexis Tsipras and his radical left Syriza party, which came in second in the election. Tsipras has publicly called for Greece to renege on the massive bailout deal it struck with its European partners and the
International Monetary Fund, which has forced Athens to make steep cutbacks. Failure by Venizelos to put together a coalition could force President Karolos Papoulias to step in as early as Friday by calling in all political leaders to try to form a national unity government. If that is
unsuccessful, Papoulias will announce another election, likely to be held next month.

“It all hinges on Tsipras -- whether he is willing to soften his stance and help move the country forward, even for a bit, or whether he remains inflexible and standoffish,” a senior official of the conservative New Democracy party said on condition of anonymity.

In a sample of the consequences Greece could face if it ultimately reneged on its tight fiscal-adjustment commitments, European creditors Thursday withheld a chunk of a $6.8-billion loan disbursal to Athens. They said they were holding on to $1.3 billion of that installment until assurances of the country’s commitment to the bailout plan were secured.

“If Greece ends the reform process it has undertaken,” warned German Foreign Minister Guido Westerwelle, “I can’t see that the respective tranches [of aid] can be paid out.”

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-- Anthee Carassava