Greece is making a last-ditch effort to form a national unity government amid warnings that the country’s future in the eurozone is at stake.
Venizelos said he had made progress after meeting the leader of the Democratic Left party, which has 19 seats in Greece's new Parliament.
PASOK and New Democracy (ND), the two largest political parties in Greece, are supportive of the country's international bailout, but only have a total of 149 seats – two short of a majority in the 300-seat parliament, which has become more fragmented after Sunday's elections.
The two political parties have previously failed to find a sufficiently large parliamentary backing to form a government (see background).
A third party is thus required for the creation of a stable government. After talks with Venizelos on Thursday, the Democratic Left leader, Fotis Kouvelis, said he was willing to join a broad-based government that would keep the country in the euro but "gradually" disengage it from the terms of the EU/IMF bailout.
"There is a very slim chance for a coalition if Kouvelis agrees," one socialist party official quoted by Reuters said, adding that his party is “split right down the middle”.
According to the daily Kathimerini, Kouvelis appears to believe that a unity government with a specific agenda could meet his two specific goals of keeping Greece in the euro and moving the country away from the fiscal restrictions of the bailout programme agreed with the European Union and International Monetary Fund.
“I propose the formation of a broad-based government made up of trustworthy political figures that will reflect and respect the message from the elections,” Kouvelis said.
The election result reflects the deep fragmentation of Greek society, since no party secured more than 19% of voters’ preferences. It has also been a huge blow for the EU-backed bailout plan, which entails harsh austerity measures and painful structural reforms in exchange for a gigantic programme of emergency loans and debt restructuring, amounting to €380 billion in total.
Greek voters have sanctioned PASOK, ND and the EU for the country's economic ruin, which has been in recession for a fifth year in a row and has seen unemployment reaching historical highs. In protest, voters have supported fringe formations on the far left and far right, all of which blame the EU/IMF Adjustment Programme for Greece’s woes.
As a result, PASOK lost 30 percentage points since the last election, in 2009, while ND suffered a 15% drop from its last historic lows, also in 2009. Both are also blamed for economic mismanagement, nepotism, incompetence and corruption.
Defenders of ND and PASOK argue that under the two parties' watch, Greece entered the list of the world’s 30 richest countries. Before the global crisis, it was ranked among the 20 most developed nations in the world, according to the UN Development Index. Both parties are also steadfastly pro-European.
But other fringe parties – including the Neo-Nazi Chrissi Avgi party, the Stalinist KKE party, and the Coalition of the Radical Left (SYRIZA), which scooped a stunning second place at Sunday's elections – firmly reject the EU/IMF Adjustment Programme.
Close respect of the programme is a condition for the EU/IMF aid and any move away from it will probably cost Greece its place in the eurozone.
This was made clear over the last five days by several European leaders, including chancellor Angela Merkel, German finance minister Wolfgang Schäuble, Commission President José Manuel Barroso, and Economic and Monetary Affairs Commissioner Olli Rehn, among others.
In Brussels, Commission spokespeople have insisted that only minor changes to the Adjustment Programme could be accepted, with a full-scale renegotiation out of the question.
Deep worries regarding the fate of Greece have dampened the mood in Brussels since last Sunday. Views are reportedly split on what is the right course of action. Some officials want to increase the pressure so that Greeks understand what is at stake. Others suggest that such a strategy may backfire, as it entails the risk of an even wider anti-European vote, in case new elections are held in June.
Some diplomats have already started to form contingency scenarios, arguing that Greek voters have chosen to reject the EU plan.
The “game is now over”, one diplomat said.