Greece bailout crisis: President seeks unity government

Greek President Karolos Papoulias, right, with Antonis Samaras Greek President Karolos Papoulias, right, faces a difficult challenge to unite deeply divided parties

Greek President Karolos Papoulias has called the country's leaders to a meeting on Sunday in a last-ditch attempt to forge a unity government.

If the president's bid fails, another election will have to be held.

Earlier, Pasok became the third party to fail in coalition talks when leader Evangelos Venizelos formally returned the mandate to the president.

Last Sunday, voters backed parties opposed to Greece's bailout deal, which requires deep budget cuts.

Greece's political turmoil has raised the possibility that it could default on its debts and be forced out of the eurozone.

Mr Papoulias said in a statement he would hold a meeting at 09:00 GMT on Sunday with the leaders of the three largest parties - the socialist Pasok, the centre-right New Democracy, and far-left bloc Syriza.

He will then hold talks with fringe parties including Golden Dawn, an extreme right-wing anti-immigration group.

Analysts say the president's bid is unlikely to succeed because the parties are so divided over the bailout.

Austerity 'denounced'

Mr Venizelos abandoned efforts to form a new government on Friday, and met the president on Saturday morning to confirm his decision.

He had held talks with New Democracy leader Antonis Samaras, whose party came first in the election, but could not find a third partner to give them a majority in parliament.

"I hope that during the negotiations chaired by Mr Papoulias everyone will be more mature and responsible in their thinking," Mr Venizelos said.

New Democracy also failed to form a coalition earlier in the week, as did Syriza, which came second in the election.

May Day protest in Athens Last Sunday's election revealed the depth of anger against the austerity measures by Greek voters

Syriza firmly rejects the terms of the most recent EU-IMF bailout, which requires tough austerity measures in return for loans worth 130bn euros ($170bn; £105bn).

Its leader, Alexis Tsipras, said on Friday he could not join any coalition that intended to implement the bailout deal.

"The bailout austerity has already been denounced by the Greek people with its vote, and no government has the right to enforce it," he said.

Analysts say Syriza could be hoping for another election after one opinion poll put them in first position in any new ballot, albeit without an overall majority.

Meanwhile, Germany has reiterated that Greece's exit from the eurozone would have dire consequences, and urged Athens to continue its deep budget cuts.

"For Greece the consequences would be much more grave than for the rest of the eurozone," said Jens Weidmann, head of Germany's central bank.

The Bundesbank chief told the Sueddeutsche Zeitung newspaper that Greece must continue its austerity reforms to justify further loans from the international community.

"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," he said.

Sunday's election saw a backlash against Pasok and New Democracy, the two parties that agreed the terms of the latest bailout.

The once-dominant Pasok, which was seen as the architect of austerity, came third with just 41 seats in the 300-seat parliament.

The Greek crisis is continuing to create unease is global financial circles.

The Fitch ratings agency warned that if Greece did leave the euro, it would probably place all 16 remaining euro nations' sovereign ratings on "rating watch negative" - meaning they would be in danger of being downgraded.

"A Greek exit would break a fundamental tenet underpinning the euro - that membership of EMU [Economic and Monetary Union] is irrevocable," Fitch said.

Greek election results graphic

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  • rate this

    Comment number 71.

    re 62. Its a lot of the "ordinary" greek people who got out of paying their tax, aswell as others richer ones. Cafe's/restaurants would only take cash not credit card as it would prove income for tax purposes [an aquaintance went on hol 2/3 yrs ago] this was the case nearly everywhere they went. like here with benefit fraud where they only have to pay for amount discovered, no interest/or fine

  • rate this

    Comment number 70.

    Are you saying that all rich are corrupt?

    And if you do anything really special for the world, really groundbreaking, the government will steal it from you like they did with Frank Whittles Jet engine patent

    Frank Whittles 1930 jet engine patent should have amassed so much wealth Bill Gates would look poor by comparison

    But like I said:
    Decent people don't get rich

  • rate this

    Comment number 69.

    Is there anyone deserving of greater contempt than dithering, self-serving and incompetent Greek politicians ? Stop grandstanding, stop posturing, bury your differences and sort out the mess you have created. Face up to your responsibilities - yet more elections will not make the problem go away.

  • rate this

    Comment number 68.

  • rate this

    Comment number 67.


    I'd love money to have no value anymore, for the way we live today to fall apart, and we all go back to hunter gatherers.
    What! Give up Andrex, you must be joking mate.
    Besides, money already has little value. I don't mind turning to barter, but let's all have clean and comfortable bottoms

  • rate this

    Comment number 66.

    The only alternative to austerity is growth.

    The problem is the western nations are mostly broke along with their banks and over-stretched populations so who do you sell too? The Chinese? Well they might have a big GDP but per head their population is still relatively poor. Therein lies the problem and why years of slowly paying our way is the painful answer.

  • rate this

    Comment number 65.

    The planet has survived "world wars", pestilance, plague, the communist system, the capitaist system and all sorts of other wonderful systems.
    This curren "crisis" LOL will be survived as well.
    Money is only a concept, it's not real. Its amazing how many people think it is though.

  • rate this

    Comment number 64.

    Greek votes:
    65-70% to stay in Euro
    25-40% to stay in Euro but question the bail-out loan terms
    Around 20% out of Euro and out of EU

    There will be a similar picture in the next elections

    The terms are the problem. EZ needs to rethink them. (See Mason's article 'Road to/Greekonomics' 9/May). EZ are stuck in a mindset and won't accept/admit that the terms don't 'save', they worsen.

  • rate this

    Comment number 63.

    Salient message here. Look after No 1.

    The Greeks didn't . Will we?

  • rate this

    Comment number 62.

    I have mixed feelings about this. On the one hand, the reality is that Greece lived far beyond its means for years, enjoying the benefits of the euro and not living up to its obligations. And this is the result

    On the other hand though, the ordinary Greek people knew nothing about the mess their elected politcians were getting them in, and they are the ones who are now suffering horrendously.

  • rate this

    Comment number 61.

    43 - andy - suspect to the vast majority of the worlds population you would be seen as being mind bogglingly rich so assume you therefore regard yourself as not nice or decent or is iyou view only relevant to people richer than you?

  • rate this

    Comment number 60.

    44. Sue Doughcoup
    It's not corruption that gives them high salaries but the gullibility of those prepared to pay them.
    Do you know anything about football? FIFA, Jack Warner, how the transfer markets work? How agents work? Offshore payments?

    Or is football just another subject you know nothing about but you thought you'd post anyway.

  • rate this

    Comment number 59.

    The euro was designed to fail so that bankers could impose some kind of one-world currency as a"temporary" measure which would of course become permanent. No longer a conspiracy "theory", you can see the cogs turning as the days go by. Only the destruction of both euro and EU can start nations back on the recovery road, along with annihilation of the present banking system. It's corrupt.

  • rate this

    Comment number 58.

    42. Utd

    That's all well and good. But Ray Mears is just the one person and can survive. Do you in all honesty believe that the environment can sustain the 60+ million in our country on a hunter gatherer level.

    On the other hand perhaps you are right then the population numbers will get back to a level based on natural selection and not the reversed Darwinian selection we have at the moment.

  • rate this

    Comment number 57.

    comment 36. Agree with you. Thats what Labour did here which is why we are in trouble here. Will take a long time to sort out, coalition needs to stop spending on HS2 [plus other expensie projects] just to save a few mins travel time [only MPs,bankers etc will be able to afford it. They aswell as civil servants need to take drastic cuts themselves in pay,expenses only for business not CDs/bks etc

  • rate this

    Comment number 56.

    Are you saying that all rich are corrupt?

    There is also the problem where things you own... end up owning you

    Even if he owned 100% of the share capital if Bill Gates had stepped up to the podium and declared that he was going to give Windows to the worlds' people for free from now on...
    the US government would step in, take over the company and certify him as insane

  • rate this

    Comment number 55.

    41. Metzalin 3MINUTES AGO

    Quite right.... extremist views will gain ground.
    But what choice do plebs have when the political elite ride rough shod over them?

    The EU is a case in point: the whole project is built on the behest of faceless bureaucrats who have driven forward with scant reference to the electorate.

    The Greeks want out... will the EU let them? Nope.

  • rate this

    Comment number 54.

    No money in the coffers but the public are complaining that the government are not spending money. If the cash is not there it cannot be spent. Any government will have their work cut out trying to explain this to the public.

  • rate this

    Comment number 53.

    Chaos is inevitable when "democracies" allow a few elected people to serve (get to close) to a few private people = financial markets and other greedy and corrupt institutions.

    What we have seen these last 4 years or so is the biggest con in history - or at best - the biggest example of incompetence by governments in history.

    Don’t blame ordinary people – our rulers are not listening.

  • rate this

    Comment number 52.

    The Greek problem is (as it is here) the absurdly high percentage of public sector workers, and their high salaries.

    On joining the EU, Greek public sector wages tripled, and the unions that pushed for this knew that the extra was being paid for with borrowed money, and they knew that the result would be an inability to repay the money.


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