New chaos looms in Greece as coalition talks fail

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By a Newsnet reporter

After Greek voters delivered a stunning rejection of parties supporting the EU-backed austerity plan, Antonis Samaras, leader of the largest party New Democracy, has said his attempts to convince the leaders of other parties that might have been open to a coalition did not succeed, and that he had handed back the mandate to form a government to the country’s president, Karolos Papoulias. 

By a Newsnet reporter

After Greek voters delivered a stunning rejection of parties supporting the EU-backed austerity plan, Antonis Samaras, leader of the largest party New Democracy, has said his attempts to convince the leaders of other parties that might have been open to a coalition did not succeed, and that he had handed back the mandate to form a government to the country’s president, Karolos Papoulias. 

Mr Samaras announced the failure of coalition talks just a few hours after being handed the mandate, despite the Greek constitution allowing him three days to find coalition partners.

Speaking in a televised address, Mr Samaras said: “I tried to find a solution for a government of national salvation, with two aims: for the country to remain in the euro and to change the policy of the bailout by renegotiation.  

“We did everything possible … We directed our proposal to all the parties that could have participated in such an effort, but their either directly rejected their participation, or they set as a condition the participation of others who however did not accept.”

According to the Greek constitution, the president will now ask Alexis Tsipras, leader of the second biggest party, the Radical Left Coalition, to form a government.  If Mr Tsipras is unable to convince enough other parties to back him in a coalition government, the third largest party, PASOK, will be given three days to attempt to form a government.  Should PASOK fail, new elections will be called.

The uncertainty over the future of the Greek government has caused jitters in the financial markets, with the euro falling to a four month low against the pound and the US dollar.  

Sunday’s election saw Greek voters punish the two traditional parties, Mr Samaras’s centre right New Democracy, and the centre left PASOK headed by by former finance minister Evangelos Venizelos.  Both parties had supported the EU bail out deal designed to secure Greece’s membership of the eurozone. 

However both parties saw a collapse in their vote on Sunday, with the previously ruling party PASOK being hardest hit, losing 119 seats in the 300 member parliament and being left with a rump of 41.  New Democracy’s vote declined by 14.6% compared to the last Greek parliamentary elections, but due to the fracturing of the opposition vote, the party actually increased its number of representatives in parliament, from 91 to 108.  

New Democracy and Pasok, the two parties pledged to support the EU bailout deal, are together 2 votes short of a majority in the 300 seat parliament.  Greece had appeared to have averted a disorderly default and euro exit last December, when a government led by former central banker Lucas Papademos, and supported by the two main parties, agreed on a second international bailout under which private bondholders accepted sharp write-downs on their holdings. 

Mr Papademos was proposed for the position of Prime Minister of Greece on 10 November 2011, after George Papandreou, head of the governing party PASOK, decided to step down and allow a provisional coalition government to form with the task of taking Greece out of the major political crisis caused by the country’s debt crisis.

But the four years of recession, wage and pension cuts and still rising mass unemployment have driven angry Greeks to reject the call for further austerity.  The big winners were parties of the extreme left and right which are opposed to the bail out plans.  

The Left Coalition gained 16.6% of the votes, making it the second largest party in the new parliament with 52 seats.  The Greek Communists gained 8.4%, 26 seats, and the Democratic Left took 6.1% of the vote and 19 seats.  All these parties are opposed to the EU bailout deal and the swingeing cuts to pay and public services the deal imposes on the country.

The centre right anti-austerity party Independent Greeks also performed well.  Formed largely by disaffected members of New Democracy, the party took 33 seats in the new parliament.  They reject the loan agreement between Greece, the EU and the IMF.   

Most worrying is the election to the Greek parliament of the extreme far-right party Chrysi Avgi (Golden Dawn), described by many commentators as nakedly neo-nazi.  Based upon a racist ideology, the party’s members use the nazi salute, and its website notes that “only Aryans in blood and Greeks in descent can be candidate members of Golden Dawn”.  The party increased its share of the vote from just 0.23% in the last elections to 6.9% this time. 

Chrysi Avgi’s policies include forcing immigrants into work camps, the immediate deportation of all illegal immigrants, and further militarisation of the already tense border with Turkey.  The election of 21 representatives of Chrysi Avgi to the Greek parliament is viewed with deep alarm by the country’s migrant communities, the largest of which is Albanian in origin, and Greece’s indigenous minorities, which include Turkish and Bulgarian speaking Muslims in the north of the country, and the country’s lesbian and gay community.

Observers believe that the continuing political uncertainty in Greece raises the probability that the country will be forced out of the eurozone.  Public support for further bailouts is wearing thin in the euro zone’s triple-A rated lenders Germany, the Netherlands and Finland, raising doubts about their willingness to go on supporting a recalcitrant Greece.