ATHENS – With Europe and world markets watching anxiously, Greece’s hopes of forming a coalition government were deadlocked in debate over whether to stick to austerity measures demanded by international lenders in return for two bailouts of $325 billion keeping the country’s economy alive. Greek Radical Left leader Tsipras says he has failed to forge a coalition that would end the country’s post-election deadlock. Tsipras says that despite his best efforts since receiving the mandate on Tuesday, he was unable to raise enough support to form a government. He says he will return the mandate Thursday to President Karolos Papoulias.
SYRIZA was a surprise second-place finisher in the May elections and it became Tsipras’ turn to form a coalition after the first-place New Democracy failed. Since Tspiras also cannot get an agreement, the baton will be passed to the third-place PASOK Socialists, who were discredited in the elections. If all three parties fail, new elections will be set tentatively for June 17 and President Karolos Papoulias, who is only a symbolic figurehead, will form a caretaker government.
Tspiras campaigned on a pledge of overturning the pay cuts, tax hikes and slashed pensions insisted upon by the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) Troika in return for loans, but critics said that could lead to Greece being forced out of the Eurozone of the 17 countries using the euro as currency and be forced to return to the drachma and catastrophe.
The Troika has warned that any attempts to tinker with reforms and fail to make an additional $15 billion in cuts by the next government would lead to a second bailout of $173 billion (130 billion euros) being stopped. Greece is surviving on a first rescue package of $132 billion. A $6.7 billion loan will be sent on May 10 despite rising uncertainty over the country’s political future, the European Commission said, but only because it had already been approved before the elections.
In Athens, Gikas Hardouvelis, economic advisor to outgoing Prime Minister Lucas Papademos, warned that Greece’s future was up in the air. “If we say no to everything, we leave the Eurozone,” Hardouvelis said. Greece is due May 15 to repay some $582 million in bonds that holders refused to write down under a restructuring of private debt. Athens is also scheduled to repay some $4.26 billion to the European Central Bank by May 18.
Athens was also warned by Luxembourg on future loans, as Foreign Minister Jean Asselborn said that money would not be forthcoming unless Greece installed a stable government. “We have to say to the Greek people right now that the situation is serious, that no European Union country will be able to release even a portion of the 130 billion euros for the Greeks, if there is no functioning government that respects the rules and manages the disbursed money,” he said in Brussels. A spokesman for another Eurozone country said: “It’s clear people are very worried about what is happening in Athens.”
Tsipras told New Democracy leader Antonis Samaras and PASOK leader Evangelos Venizelos that if they wanted to be in a power-sharing government, they would have to withdraw their signatures from the loan agreements, but they refused. A coalition needs 151 votes in the 300-member Parliament to rule although there is an exception: a government can reign with 120 votes but needs a vote of confidence to do so, a prospect unlikely given the tension and disagreement between the parties. The Independent Greeks, a new party formed by New Democracy outcast Panos Kammenos, finished fourth, the Communists fifth, and the Democratic Left finished seventh. No one wants to deal with the sixth-place surprise finisher, the neo-Nazi Golden Dawn jingoists.
Tsipras set out six terms for any agreement with other parties: immediate cancellation of the terms of the EU-IMF memorandum, the cancellation of the law that ends collective contracts, changes to the electoral system so proportional representation can be introduced, public review of Greek banks and the formation of a debt inspection committee that will investigate whether any of Greece’s debt can be termed “odious.” He said, “The expression of the public’s will has made the memorandum null and void and has chosen as its first alternative a left-wing government that will cancel the loan agreements.”
RETURN TO SENDER
The newspaper Kathimerini said that Tsipras would send a letter to European Commission President Jose Manuel Barroso, European Council President Herman Van Rompuy and European Central Bank chief Mario Draghi to argue that the result of the elections, which saw the two signatories of the EU-IMF bailout, PASOK and New Democracy, receive just 32 percent of the vote, meaning that the terms of the bailout can no longer apply.
“Mr. Tsipras with his statements … is doing everything possible not to form a government,” Samaras said, adding that his rival was asking him to “put my signature [on] the destruction of Greece.” Samaras said that his party would be prepared to back a minority government “as long as it secures the country’s position in the Eurozone and its national interest.” But he said Tsipras’ statement left no doubt “that he has no intention of safeguarding Greece’s European identity and future” and revealed “unbelievable arrogance.”
Samaras called for the formation of a broad, center-right front that would guarantee Greece’s position in the Eurozone, while taking into account the Greek people’s mandate for changes in economic policy and the rage that brought down the ruling parties who had dominated Greek politics for 38 years. He called all center-right political powers, whether elected or not, to rally under his party’s umbrella, arguing that New Democracy was the sole party in a position to guarantee the country’s European course.
Venizelos issued a statement saying that his position on keeping Greece in the euro was non-negotiable. Tsipras met with Democratic Left leader Fotis Kouvelis, who said he would support SYRIZA if it could form a majority government. The Ecologist Greens, however, rejected the leftists’ overtures, arguing that SYRIZA did not have a clear plan for exiting the crisis.
Kouvelis dismissed any speculation of becoming prime minister in a possible coalition government.
Speaking on Real radio, Kouvelis reiterated that his party would not take part in a government based on no prior policy agreements and which would not include the participation of second-placed SYRIZA.
Kammenos said that Greece needs a “national solution right here and now.” Speaking to his party’s newly elected Parliamentary group of 33 deputies, Kammenos urged the leaders of PASOK and New Democracy to resign from their positions or withdraw their letters pledging the country’s commitment to the conditions of the EU-IMF bailout.
(Sources: Kathimerini, Reuters, AFP)