Greece election: Greek recovery at risk, as bid to form coalition passes to anti-bailout party

THE leader of the Greek conservative party said last night that his efforts to form a coalition government had failed – leaving the country’s international bailout in question.

Conservative leader Antonis Samaras’ New Democracy party won the most votes in Sunday’s elections. But he announced last night that a coalition led by his party would be “impossible”.

That could prove a significant blow to supporters of foreign bailouts. The anti-austerity far-left Syriza party, which came in second, will now try to build an anti-bailout coalition to rule the country.

“I tried to find a solution for a government of national salvation, with two aims: for the country to remain in the euro and to change the policy of the bailout by renegotiation,” Mr Samaras said.

“We did everything possible. We directed our proposal to all the parties that could have participated in such an effort, but they either directly rejected their participation, or they set as a condition the participation of others, who did not accept,” he said.

If the three-day talks between Syriza and other parties fail, the party that came in third in Sunday’s vote, the socialist Pasok, headed by former finance minister Evangelos Venizelos, will get the mandate for a further three days.

If the deadlock does not ease, Greece faces new elections under a caretaker government in mid-June, about the time it has to detail drastic new austerity measures worth €14.5 billion (£11.69bn) for 2013-14.

In June, Athens is also due to receive a €30bn (£24.2bn) installment of its rescue loans from the other countries in the eurozone and the International Monetary Fund.

Disaffected voters deserted Pasok and New Democracy, the two mainstays of Greek politics, leaving them at their worst level since 1974, when Greece emerged from a seven-year dictatorship.

Instead, strong gains were made by smaller parties, including the extremist “patriots” Golden Dawn.

Yesterday, German chancellor Angela Merkel insisted any new Greek government must continue to implement the mix of austerity measures and structural reforms that the country has agreed to in exchange for its international bailouts.

Germany says it will work with any democratically elected Greek government. However, Ms Merkel cautioned that “of course, the most important thing is that the programmes we agreed with Greece will be continued”.