Greek president makes last push to avert elections

ATHENS Sat May 12, 2012 7:03pm EDT

1 of 6. Leader of the Socialists PASOK party Evangelos Venizelos (R) meets leader of Conservatives New Democracy party Antonis Samaras in Athens May 11, 2012.

Credit: Reuters/Yorgos Karahalis

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ATHENS (Reuters) - Greece's president will meet party leaders on Sunday in a final bid to cobble together a coalition and avert a repeat election, but the veteran politician's effort looked set to fail because of deep splits over an EU/IMF rescue plan.

Voters enraged with austerity are likely to be called to the polls again as soon as mid-June, with opinion polls showing the balance of power tipping towards leftists opposed to bailouts that averted bankruptcy but deepened a devastating recession.

A week of efforts to put together a government since Sunday's inconclusive election have failed because neither the pro- nor the anti-bailout camp had enough seats to rule in the hung parliament.

Parties stuck to their guns on Saturday, making any chance of an eleventh hour deal appear remote. EU leaders have warned that without a government backing the 130-billion euro rescue plan agreed in March, Greece would stop getting aid and could find itself pushed out of the euro.

"Country on a dangerous path," conservative daily Kathimerini warned on its front page. "If there isn't, even now, the immediate rebuilding of the pro-European bloc it will be difficult to avoid a national adventure or catastrophe."

The anti-bailout vote was scattered among a number of small parties in the first election, but now appears to be consolidating around the Left Coalition SYRIZA party and its charismatic 37-year-old leader Alexis Tsipras.

He has much to gain from a new vote: several opinion polls showed this week that SYRIZA would place first if the election is repeated, a prize that would come with a bonus of 50 extra seats in parliament at the expense of the pro-bailout camp.

Politicians have proposed an "ecumenical government" of all parties that would try to modify the bailout terms, but SYRIZA has refused to take part.

"It is obvious that there is an effort to bring about a government that will implement the bailout. We are not participating in such a government," SYRIZA spokesman Panos Skourletis said on Saturday.

Another group, the more moderate Democratic Left, could have provided the pro-bailout parties with enough votes to form a cabinet but has refused to do so unless SYRIZA joins too.

President Karolos Papoulias, whose ceremonial role normally requires him to remain above the political fray, will first meet the three biggest parties - the conservative New Democracy and socialist PASOK which support the bailout, along with SYRIZA - at 0900 GMT.

He will later hold individual meetings with four smaller parties that also entered parliament. In a sign of the ructions that the crisis has caused in Greek politics, for the first time those include the far right Golden Dawn, whose members give Nazi-style salutes and sport a logo that resembles a Swastika.

In one of the many sub-plots of what has become a captivating political drama, Greeks will watch with interest to see how Papoulias, a much-revered 82-year-old veteran of the anti-Nazi resistance during World War II, receives them.

RUSSIAN ROULETTE

The constitution sets no deadline for Papoulias to seek a deal and he has given no indication how long he will spend trying. If he fails, he will have to call a new vote in June.

Centre-left daily Ethnos warned on the front page of its Sunday edition that politicians were playing "Russian roulette" with an economy in its fifth straight year of recession, where one in five is unemployed, and with coffers that could be empty as soon as June if no fresh cash comes from the EU and IMF.

If a new election is called, the conservative and socialist parties that dominated Greece for generations but were punished by voters for the bailout will hope that the prospect of ejection from the euro will frighten Greeks back into the fold.

But voters angry with the austerity are unrepentant and now have found a standard-bearer in Tsipras, a former student leader and Communist who has tapped into the anger of the young.

Backing for SYRIZA stood at 25.5 percent - almost 9 points up on its result in the election a week ago and well ahead of either of the traditional parties - according to a poll by Metron Analysis published by Epenenditis weekly.

Tsipras says he wants to keep Greece in the euro, and that European leaders are bluffing when they threaten to eject Athens from the single currency if it goes back on its bailout pledges.

But officials in Brussels who once refused to discuss any country leaving the euro now talk about a Greek exit as a real, if painful, possibility. A prospect once seen as devastating for the continent's financial system is viewed as more manageable since banks wrote off much of their Greek debt this year.

"Technically, it can be managed," Irish central bank chief and European Central Bank policymaker Patrick Honohan said on Saturday, saying Greek exit would be a knock on confidence in the euro zone as a whole but would not necessarily be "fatal".

(Additional reporting by George Georgiopoulos and Lefteris Papadimas; Writing by Ingrid Melander; Editing by Peter Graff)

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