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Greek coalition talks collapse; new elections almost certain

May 15, 2012 |  7:18 am


ATHENS -- More than a week of attempts to form a coalition government in Greece collapsed in acrimony Tuesday, making it all but certain that the country will hold fresh elections next month and casting more doubt on vital bailout funds and the future of the common European currency.

The repeat elections could take place as early as June 17, senior government and political party officials say.

The breakdown in negotiations over a new government capped nine days of high drama after inconclusive elections on May 6 resulted in Greece's worst political deadlock in decades.

The leaders of the top three parties tried but failed in turn last week to muster a ruling coalition. That left Greek President Karolos Papoulias to try to bring them together in a national unity government.

But talks broke up Tuesday afternoon, the participants leaving with angry looks on their faces.

Papoulias on Monday had proposed a government of technocrats to stave off a repeat round of elections. The political instability in Greece has heightened fears that the country is headed for a possible exit from the Eurozone, the 17 nations that use the euro currency.

Although polls indicate that about 77% of Greeks want their country to remain in the Eurozone, nearly seven in 10 voters cast their ballots in support of smaller parties opposed to the harsh austerity policies that previous governments have accepted in exchange for two international bailouts.

Under those deals, Greece has promised to make an additional $14 billion in budget cuts by June. Failure to do so could jeopardize the rescue loans keeping the country afloat and push Greece closer to a chaotic default, which could have untold consequences on the global economy.

The result of a new election might be no more decisive than the one produced May 6. According to opinion polls, however, the hard-left Syriza party, led by charismatic 37-year-old Alexis Tsipras, looks set to improve on its surprise second-place finish. The party pledges to tear up the bailout agreements.

That would put Greece on a collision course with its European partners, who have warned Greece that reneging on its commitments would result in its expulsion from the Eurozone and withdrawal of the loans now keeping it afloat.

"We shouldn't be heading down this road," Evangelos Venizelos, the leader of the Socialist party, told reporters. "But we are forced to, and with the help of God let us hope it won't take us to the worst."


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-- Anthee Carassava

Photo: Alexis Tsipras, center, of the hard-left Syriza party attends talks in Athens on forming a coalition government for Greece. Credit: Simela Pantzartzi / EPA