Party leaders face final attempt to agree unity deal
President Karolos Papoulias is due to meet the heads of Greece’s three leading parties at noon on Sunday in a final attempt to secure a deal for the formation of a government, as Athens comes under increasing pressure about its future in the eurozone.
Papoulias will call together the three leaders that each received a mandate to form a government but failed: New Democracy’s Antonis Samaras, Alexis Tsipras of the Coalition of the Radical Left (SYRIZA) and PASOK’s Evangelos Venizelos.
PASOK and ND have suggested that they would cooperate in a unity government with SYRIZA and the smaller, pro-European leftist party, Democratic Left (DIMAR), but the leftist coalition has rejected their overtures. It is opposed to the terms of Greece’s loan agreement with the European Union and the International Monetary Fund and believes the May 6 election result “delegitimizes” the bailout.
SYRIZA says there is no way it will join a government without guarantees that austerity measures will be abandoned. Democratic Left has proposed all four parties create an administration with the aim of keeping Greece in the euro and forming a plan to disengage from the EU-IMF memorandum.
However, DIMAR says it will not participate in a government just with New Democracy and PASOK. Without the leftists, ND and PASOK are just short of the 151 seats needed to form a new government.
Greece’s political leaders are being under increasing pressure from EU officials, who insists funding to Athens will be cut off if it does not abide by the terms of its loan deal.
European Central Bank policymaker and head of Germany's Bundesbank Jens Weidmann told Sueddeutsche Zeitung in an interview on Saturday that the ball is in the Greek court.
"If Athens does not stand by its word, then that's a democratic decision. The result is that there is no more basis for further financial aid,» Weidmann said.
"For Greece the consequences would be much more grave than for the rest of the euro zone,» he said. «I think it is too simple to think Greece's problems would be solved by leaving the euro area."
"The donor countries also have to justify themselves toward their own population,» Weidmann said.
Outgoing Deputy Prime Minister Theodoros Pangalos suggested Greeks should take the threat of bankruptcy seriously, adding that the government would run out of money next month.
"There is a school of thought that says the Germans are bluffing. They need Greece and will never throw us out of the eurozone. But what will happen, which is almost certain, is they will not give us the money to pay our debts,” Pangalos told The Sunday Telegraph.
"We will be in wild bankruptcy, out-of-control bankruptcy. The state will not be able to pay salaries and pensions. This is not recognised by the citizens. We have got until June before we run out of money.
Germany is ready to consider additional measures to promote growth in Greece but the struggling economy must still carry out agreed reforms, German Finance Minister Wolfgang Schaeuble said in an interview with the Welt am Sonntag weekly on Saturday.
"If the Greeks have an idea of what we could do, in addition, to promote growth, we can always talk and think about this,» Schaeuble was quoted as saying. «But ultimately it is about making Greece competitive again, allowing the economy to grow and opening the path to the financial markets again."
"That requires the agreed, fundamental reforms being carried out, otherwise the country has no prospects."
He added that staying in the eurozone was Greece’s own choice and that it must not stray from austerity if it expects to get international cash.
"I can understand the Greeks well ... they are suffering a lot,» said Schaeuble. «There is no comfortable path for Greece."
"There is not a better solution. Greece must now show if it has the power to get the necessary majorities for this. I can only hope that those responsible in Greece will quickly see reason."
SYRIZA’s European policy spokesman Yiannis Bournos told The Sunday Telegraph that Greece’s partners could not afford to force it out of the eurozone.
"Mr Schaeuble [Germany's finance minister] is pretending to be the fearless cowboy on the radio, saying the euro is secure [against a Greek exit]. But there's no way they will kick us out,» he said.
"If we left the euro, the financial markets would attack Italy. If you owe 3000 euros to the bank and don't pay, they will kill you. If you owe 10 billion euros, they will do everything for you."
Inconsistencies in the public comments made by SYRIZA officials over the past few days led to Democratic Left leader Fotis Kouvelis issuing a statement on Saturday asking his the leftist coalition to clarify its position on a number of issues.
Chief among these was whether the party advocates a unilateral rejection by a government it will participate in of the terms of the EU-IMF loan agreement. Kouvelis also asked SYRIZA to explain what it would do following new elections that are unlikely to give any party a clear majority. He also called for SYRIZA to respond to written opinions from members of 10 parties that are part of its coalition, which advocate that Greece returns to the drachma.
After meeting Samaras, Tsipras and Venizelos on Sunday, President Papoulias will also hold talks, individually, with the other leaders of parties that won parliamentary seats in Sunday’s vote. Apart from Kouvelis, these are Panos Kammenos of the nationalist Independent Greeks, Aleka Papariga of the Communist Party (KKE) and Nikos Michaliolakos of the neofascist Chrysi Avgi (Golden Dawn).