The leader of Greece’s Coalition of the Radical Left (Syriza) -- which has been tasked with forming a coalition government in the wake of chaotic elections on Sunday – said Tuesday he will not seek any kind of alliance with either of the formerly dominant parties, the Socialist Pasok or the conservative New Democracy.
Antonis Samaras, whose ND gained the most votes in Sunday’s parliamentary poll, failed to form a coalition government on Monday. Reportedly, some parties, including the Communist Party of Greece (KKE), refused to even speak to him.
Pasok, led by former Finance Minister Evangelos Venizelos, finished a humiliating third in the election, making it impossible for him to play a decisive role in any new coalition without the support of other parties.
Syriza leader Alexis Tsipras, following a meeting with President Karolos Papoulias, scorned both Pasok and ND – which formed an uneasy coalition in the prior government that oversaw hugely unpopular budget cuts in exchange for bailout funds from the European Union and International Monetary Fund to help repay Athens’ mountain of debts.
“If Mr. Samaras and Mr. Venizelos genuinely regret their disastrous decisions, let them write to the EU and IMF leaders tomorrow, revoking their signatures,” Tsipras said.
“If they don’t, I call on them to stop duping the Greek people.”
Syriza, an umbrella of left-wing organizations that are vehemently opposed to the euro zone bailouts and subsequent austerity programs in Greece, scored a surprisingly strong second-place finish in parliamentary elections with a 16.8 percent showing, just behind Samaras’ ND, which gained 18.9 percent.
Tsipras said any leftist-dominated government he forms would be founded on five principles: the elimination of the debt deal with EU/IMF; the abolition of laws which overruled collective labor contracts; political reforms, including more accountability for MPs; state inspections of the banking system and a moratorium on Greece’s debt repayments.
“We seek dialogue,” he said.
He is expected to first meet with the leader of the Democratic Left, Fotis Kouvelis, whose party gained 6.1 percent of Sunday’s vote.
Tsipras will likely eventually meet with most other party chiefs, with the exception of the extreme right-wing Golden Dawn party, which scored an impressive 7 percent of the vote. (Samaras also had refused to meet with Golden Dawn officials).
However, Tsipras has only three days to form a new unity government.
In the event that Tsipras fails to create a coalition, Pasok (as the next most successful party in the election) will give it a go.
Evangelos Venizelos said leftist groups should be part of any coalition.
It is necessary for the government of national unity to include all the forces that have a pro-European outlook, he said.
The minimum level of agreement is that Greece remains in the euro.
If Pasok fails to form a coalition, another round of elections may ensue as early as next month – a development that euro zone ministers and especially Germany would dread.
Chancellor Angela Merkel has already warned Greece it must abide by the terms of austerity.
Meanwhile, fears are escalating that Greece is not long for the euro zone.
Kenneth S. Rogoff, a professor of economics at Harvard and a former chief economist at IMF, told the New York Times: “It’s not clear how [Greece] can survive within the euro over the longer term. A Greek exit would underscore that there’s no realistic long-term plan for Europe, and it would lead to a chaotic endgame for the rest of the euro zone.”
Carl Weinberg, the chief economist at High Frequency Economics, a financial research group in Valhalla, N.Y., warned: “Greece is lurking as a problem, not so much because it could leave the euro and tear things apart, but because it could before that default and trigger financial events that could cause the crisis to spread.”
Indeed, if Greek political parties fail to come to some kind of compromise, the country may be unable or unwilling to abide by the terms of the two EU/IMF loans. In exchange for a total of 240 billion euros ($312 billion) in rescue funds, Athens had agreed to a painful program of job cuts, spending reductions, tax hikes and salary/pension freezes.
Of greater urgency, Athens needs to find another 11 billion euros ($14.3 billion) of cuts next month, or the government may default on the bailout loans, leading to a possible exit from the euro zone.
The next installment of 30 billion euros in EU/IMF loans is also scheduled to be delivered next month.