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 91.

    Loan sharking - Greece has been borrowing at 7 %! and the rest of the EU countries are borrowing at 0.5%! The recent loan of 4billion (which was 1 billion less) was borrows to pay the money owned!

  • Comment number 90.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 89.

    In Greece, no one can deny the fact that we have made terrible mistakes. The ones who are going to pay for those mistakes are people who didn't even get to vote, because they were to young to do so. What I 'm saying is that we're only asking for hope. We want to pay our debts and we have done for a very long time now. Just give us a chance to get rid of those useless politicians, now!

  • rate this

    Comment number 88.

    I think we should let our "dream coalition team" go over to Greece for a sabbatical to sort out the Greek's problems for them.

    I mean they are doing such a good job here!

  • rate this

    Comment number 87.


    Why we have massive debts?

    The tax we pay doesn`t cover the cost of govt spending - simple!

  • rate this

    Comment number 86.

    Once the Greek people default the Greeks will be fine and can get on with living within their means

    The corrupt Greek elite, who were encouraged (bribed) by the EU with loans will find it impossible to borrow more money

    Greece will trundle along as a minor economy, shunned by the international loan shark community and focusing on self reliance.

  • rate this

    Comment number 85.

    To expand on easily-made comments like, 'Nobody can be blamed for the Greek situation other than the Greeks themselves'. You could add EZ offering/pushing cheap money to buy EZ goods, the banks, the rich, the self-defeating bail-out terms, stagnant-creating austerity, high interest rates for loans, Eurobond rejection, old Grk political scene, German intransigence, EU ill-informed decisions, etc.

  • rate this

    Comment number 84.

    I propose that the eurozone establish an official procedure for leaving, be it voluntarily or not. This would respect democratic decisions in the member states ( e.g. referendums ) and make it clear, that blackmailing by countries which do not abide by the rules does not work.

  • rate this

    Comment number 83.

    71. sheila coleman
    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
    Believe it or not but people do deals for cash in this Country, most pubs only take cash but then I suppose you believe no company or nobody avoids tax in this Country

  • rate this

    Comment number 82.

    It seems to be that the "Haves" seemed of done alright during this crisis and are in fact getting richer, whilst the masses are paying for it. Well start spending your money "Haves" and employ people in honest work, or suffer a revolution, (never turns out good for the wealthy)

  • rate this

    Comment number 81.

    I agree Sheila Coleman - 71.
    6 months ago in the Times an English reader's sister had lived in Greece for 30 years. It seems that it wasn't taxes going up that irritated the 'ordinary' Greeks, but the ever increasing cost of bribing the Local Tax Inspector to accept falsified income figures.
    But if they don't want the bail out fine - their probably better off out of the Euro, and can devalue.

  • rate this

    Comment number 80.


    The only alternative to austerity is growth.
    They keep feeding you this mantra, it is false. Japan has been stagnant for 20 years.

  • rate this

    Comment number 79.

    A common view emerging is that's it's not the Greek peo

  • rate this

    Comment number 78.

    And after spending Greece into a financial hole, notice that not one Greek politician has been sent to jail, as incompetence is not a crime.

    Such democracy!

  • Comment number 77.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 76.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 75.

    Like the Greeks we have "massive debts". I don't know why as I pay far more in tax than I ever get back in kind. In fact the gas bill is due to rise so it will not be" heat or eat" it is just "eat" if you grow your own.
    I wish we could vote on austerity or growth like the Greeks.

  • rate this

    Comment number 74.

    7 Minutes ago
    Are you saying that all rich are corrupt?
    Maybe depends on ones definition of corrupt. Dodging taxes or robbing banks? I doubt anyone got rich by being nice guy and philanthropist for sure. It requires the exploitation of others. Why do they move production around to cheapest 3rd world sources

  • rate this

    Comment number 73.

    Here is an idea.

    Greece is in big debt and struggles with repayments.

    OK... this is clever. Get the bank they owe to give them more loans so they can pay off the old loan. So the bank pays off its own loan... and the Greek people don't see a € of it! They must have a dose of austerity...for many years.

    I am surprised nobody else thought of this solution!

  • rate this

    Comment number 72.

    Chaos results when democracies allow a few elected people, politicians, 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.


Page 25 of 29


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