Coalition talks stall, Greece faces "moment of truth"
ATHENS (Reuters) - Greek political leaders on Sunday ignored a final plea from the president to form a coalition government to avert a repeat election, pushing the debt-stricken nation closer to bankruptcy and a possible exit from the euro zone.
Leaders of the three biggest parties met at the presidential mansion for a final attempt to bridge their differences, but the talks quickly hit an impasse as they traded accusations on a deeply unpopular bailout package tied to harsh spending cuts.
Conservative leader Antonis Samaras, who finished first in last week's election, pinned the blame on the far-left SYRIZA party, which flatly rules out backing a pro-bailout coalition with Samaras's New Democracy and Socialist PASOK parties.
"They are not asking for agreement, they are asking us to be their partners in crime and we will not be their accomplices," said Alexis Tsipras, who has become an overnight sensation since leading SYRIZA to a surprise second place in the vote.
The other leader at the morning talks - Socialist leader Evangelos Venizelos - said he was holding on to hopes that a deal could still be salvaged, but warned time was running out.
"Despite the impasse at the meeting we had with the president, I hold on to some limited optimism that a government can be formed," said Venizelos, whose PASOK party finished a humiliating third in the election, a shadow of its former might.
"The moment of truth has come. We either form a government or we go to elections."
Both New Democracy and PASOK - which have taken turns in ruling Greece for nearly four decades and jointly negotiated a bailout that requires deep cuts in wages, pensions and spending - are eager to avoid facing the voters again.
Polls since the election show the balance of power tipping even further towards opponents of the bailout, who were divided among several small parties but now appear to be rallying behind Tsipras, a 37-year-old ex-Communist student leader.
Tsipras has injected a dose of enthusiasm into the squabbling left and offered hope to millions of austerity-weary Greeks by promising to rip up the bailout deal without abandoning the euro, saying Europe cannot afford to cut Greece loose.
European leaders have retorted that the country will not get new loans to stay afloat if it fails to honor its pledges, while banks and some companies like travel operator Kuoni have begun to prepare for a Greek exit from the eurozone.
But Greek voters remain unfazed. Indeed, they are expected to hand SYRIZA a first-place finish in a new election, winning the party an automatic extra 50 seats at the expense of Samaras.
President Karolos Papoulias now meets the small parties that made it parliament from 1630 GMT onwards in a last-ditch bid to stitch together some form of a "national unity" government.
His final hope rests with the small Democratic Left party led by lawyer Fotis Kouvelis, which could provide enough seats to form a government with New Democracy and PASOK. But it says it will not do so unless the coalition also includes SYRIZA.
Papoulias' list of meetings also include the far right Golden Dawn, which made it parliament for the first time in its history on an anti-immigrant and anti-politician platform.
In one of the unfolding drama's many sub-plots, Greeks will watch with interest to see how the president, a revered 82-year-old veteran of the World War II anti-Nazi resistance, receives a group whose members give Nazi-style salutes.
The constitution sets no deadline for Papoulias to complete his search for a deal and he has given no indication how long he will spend trying before he calls a new election.
Greeks seem resigned to returning to the polls.
"Why would we believe they'll agree on something? All they care about is being in power and we're sitting here not even able to pay our electricity bills," said Maria Kissou, 53, a corner shop owner in Athens. "Let us go to elections again."
Kissou voted for Tsipras on May 6.
"He's young, I like him because at least he's trying to renegotiate with the Europeans," Kissou said.
Supporters of the two establishment parties will be hoping that if a new election is held, Greeks will be frightened of the prospect of leaving the euro and return to the fold.
Polls show an overwhelming majority of Greeks reject the bailout but want to keep the euro - a position widely regarded as untenable. As many as 78.1 percent want the new government to do whatever it takes to keep their country in the currency, a poll by Kappa Research for To Vima daily showed.
In a sign of the shifting mood in Europe towards Greece, Germany's influential Der Spiegel magazine suggested an exit from the euro zone may now be the best option in a front-page
Its front page headline read: "Acropolis, Adieu! Why Greece must leave the euro."
"The Greeks were never ripe for the currency union and they still are not today," the German magazine wrote in an editorial.
"Only an exit of Greece from the euro zone gives the country a chance in the long term to get back on its feet."
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