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Greek crisis talks fail to yield cabinet deal

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Radical left leader Alexis Tsipras says he will not join or support a pro-bailout coalition governmentGreek radical left leader Alexis Tsipras says he will not join or support a pro-bailout coalition government, saying he cannot agree to what he terms a mistake. His continued refusal makes new elections in the crisis-struck country more likely.

Tsipras made the comments on Sunday after attending a meeting convened by President Karolos Papoulias with the head of the conservative New Democracy and socialist PASOK parties. Papoulias is making a last-ditch effort to broker an agreement and break the deadlock created by the elections, which left no party with enough parliamentary seats to form a government.

If no deal is reached, Greece must hold new elections next month, prolonging the political uncertainty and endangering the country's euro membership.

"Even now, despite the impasse at the meeting we had with the president, I hold on to some limited optimism that a government can be formed"

- Evangelos Venizelos, Socialist leader

Papoulias, whose ceremonial role normally keeps him above the political fray, was to meet smaller parties elected to parliament later in the day.

European Union leaders have warned that without a government that backs the rescue plan, Greece will stop receiving payments and could find itself pushed out of the eurozone.

Sunday's meeting broke up after less than two hours of talks, and leaders said the discussions had hit a snag, though they expressed the hope that difficulties could be overcome.

Socialist leader Evangelos Venizelos said he felt "limited optimism" after the talks.

"Even now, despite the impasse at the meeting we had with the president, I hold on to some limited optimism that a government can be formed," he said.

He told party cadres that the talks came to a "dead end," indicating that hopes now fall on the co-operation of a smaller pro-European leftist party.

Syriza, which made massive gains to come second in last Sunday's election, campaigned on an anti-bailout platform and insists any new government must cancel the austerity measures Greece has had to commit to in exchange for international bailouts.

'Partners in crime'

After the talks, Syriza's leader Alexis Tsipras said the group refused to join a national unity government that includes parties supporting the bailout.

"They're not seeking an accord with Syriza ... they're asking us to be their partners in crime and we will not be their accomplices,"he said.

Tsipras argues that the bailout terms are so onerous that they are giving the country's battered economy no chance of recovery.

But both PASOK's Venizelos and New Democracy's Antonis Samarashave, whose parties negotiated the deals, have slammed Tsipras' position as irresponsible.

They say his policies would lead to disaster and force Greece out of the EU's joint currency, something that none of the political leaders say they want.

The political impasse must be overcome by Thursday, when parliament convenes, or new elections will have to be called in June.

A new poll published hours before the meetings on Sunday showed Greeks were desperate for a coalition government that will keep the country in the euro.

An overriding 72 per cent said parties should co-operate "at all costs" in the Kappa Research poll published in To Vima weekly.

In response to a separate question, 78.1 per cent said the new government should do "whatever it takes" to keep Greece in the euro.

Another group, the more moderate Democratic Left, could have provided the pro-bailout parties with enough votes to form a cabinet but has refused to do so unless Syriza joins too.

Exit not 'fatal'

European leaders say keeping the euro is impossible for Athens unless it sticks to the pledges to clean up its finances
that it made in the bailout.

Officials in Brussels who once refused to discuss any country leaving the euro now talk about a Greek exit as a real, if painful, possibility.

A prospect once seen as devastating for the continent's financial system is viewed as more manageable since banks wrote off much of their Greek debt this year.

"Technically, it can be managed," Irish central bank chief and European Central Bank policymaker Patrick Honohan said on Saturday, saying Greek exit would be a knock on confidence in the eurozone as a whole but would not necessarily be "fatal".


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