Last-ditch negotiations to form of a unity government in Greece appeared to reach a dead end yesterday (13 May) when the country’s political parties failed to reach agreement on a mandate. New elections now look almost certain, with the spectre of a eurozone exit looming large.
Only two political parties in parliament – the centre-right New Democracy (ND) and the Panhellenic Socialist Movement (PASOK) – support the EU-backed bailout programme and its related austerity measures, which have kept the country's finances afloat at the cost of massive social unrest.
However, ND (108 MPs) and PASOK (41 MPs) suffered unprecedented losses in last week’s election, and they do not have enough seats to secure a majority in the country’s 300-seat parliament, even if they form a coalition.
Moreover, their leaders are arguing that the election results do not give them a mandate to press ahead with the implementation of austerity measures demanded by the country’s international lenders, without the support of other political forces.
The Communist Party (KKE, 26 MPs) favours the withdrawal of Greece from the EU altogether, the right-wing Independent Greeks (33 MPs) argue that Greece should opt for an outright default, while no one is willing to get into coalition talks with the neo-Nazi Golden Dawn (21 MPs).
The only available allies for ND and PASOK are the moderate leftist Democratic Left (DIMAR, 19 MPs) and the Coalition of the Radical Left (Syriza, 52 MPs).
Although both of the latter parties in principle support Greece’s eurozone membership, they strongly disagree with the EU-imposed Adjustment Programme and related austerity measures.
DIMAR was persuaded to enter talks to form a unity government, amid warnings from senior EU and German officials that Greece might be forced to leave the eurozone if it fails to honour its commitments.
But Syriza, which, which was catapulted to second place, insists that the “people of Greece have spoken”, and the memorandum of understanding between Athens and the Troika has now lost its political legitimacy.
"They are not asking for agreement, they are asking us to be their partners in crime and we will not be their accomplices," Alexis Tsipras, the leader of Syriza, said yesterday.
For its part, DIMAR refuses to participate in a unity government without the support of Syriza, since, like PASOK and ND, party leaders fear that the political cost of rebuilding Greece will be unbearable. Party leaders also fear that Syriza will lead a wave of demonstrations, which will invalidate any attempt to implement the austerity measures.
Given the political impasse, it seems likely that the President of the Greek Republic, Mr. Karolos Papoulias, will soon give up on his efforts and call for new snap elections, which will most likely be held on 17 June. Besides, Syriza leader Alexis Tsipras has said that he will not even attend today's meeting of political leaders under the auspices of President Papoulias (19:30 Athens time), which will most probably constitute the very last effort to overcome the impasse.
European Commission President José Manuel Barroso admitted for the first time that it would be better for Greece to leave the eurozone if it is unable to meet its obligations.
“I have a lot of respect for Greek democracy and also the Greek parliament but I also have to respect the other 16 parliaments," Barroso said in an interview with Italian news channel SkyTG24 posted on its website on Friday.
"If the agreements are not respected it means there are not the conditions to continue with a country that does not respect the agreements," he said.
Asked whether his comments meant that Greece could be forced out of the single currency, he said no member of any organisation could continue if it did not stick to the agreed rules.
"Look, if a member of a club, I don't want to talk about a particular country, but if a member of a club does not respect the rules, it's better that it leaves the club, and this is true for any organisation or institution or any project," Barroso said.
He spoke in English, but the original could not always be heard, because of the translation voiceover.