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3:08PM BST 15 May 2012
Nine days after an inconclusive poll, efforts broke down after Syriza, the Radical Left Coalition, refused to form a government of technocrats or “respected personalities” proposed by President Karolos Papoulias.
A caretaker government will be formed on Wednesday, said a spokesman for the president.
Evangelos Venizelos, the Socialist party leader, said after the meeting: “For God’s sake, let’s move towards something better and not something worse. Our motherland can find its way, we will fight for it to find its way.”
Seeking to end the deadlock, the president had met five political party leaders after the May 6 election plunged the heavily indebted country into further disarray.
The failure to break the deadlock quickly sent markets tumbling and was set to increase speculation that Greece would become the first country to leave the euro.
Voters had flocked to Syriza and other parties opposed to the austerities attached to the 130 billion euro bailout agreed with the EU and IMF.
Amid threats from Syriza to cancel the deal, the results caused consternation in Berlin and Brussels, where leaders warned that Greece had no option but to stick to reforms. Germany’s Chancellor Angela Merkel and her finance minister Wolfgang Schaeuble hinted heavily that they were prepared to take the consequences of a Greeek exit.
Greeks will now have to decide whether to hinge their votes on anger, or to revert to the establishment parties, Pasok and New Democracy, that led them into an economic crisis of unprecedented proportions.
Some analysts predicted that a second election would prove inconclusive and would soon be followed by a third.
“We are going to have not just one but two more elections,” said Spiros Rizopoulos, owner of Spin Communications, a consultancy in Athens.
In his view, some voters would pull back from Syriza and its charismatic yound leader Alexis Tsipras, but not enough to guarantee a majority for the old guard, an outcome that would necessitate a third poll.
“Tsipras is running on rage but you can only go so far on rage. At some point you have to say ‘this is my ideology’, this is what I am going to do’.
“Syriza is a collection of cadres, it is not a party as such, there doesn’t seem to be a plan for government. The traditional parties will need to ask him ‘what is your programme, what is your ideology, can you negotiate with Brussels, do you believe in Europe?’ - all the things they didn’t ask during the first campaign.”
The protracted political certainty has left Greeks frustrated and worried about whether a government of non-elected individuals would work.
“The solution is provided by democracy and democratic procedures. This means that there should be another election and they should stop intimidating the people and engaging in tactics of terror,” said Athens resident Yannis Ekaterinaris.
No party won an outright majority in Greece’s May 6 election, leading to an impasse that has shaken financial markets and led to questions about Greece’s ability to stay in the eurozone. Power-sharing efforts have failed so far after the left-wing Syriza party, which came second in the vote, insisted that the draconian terms of Greece’s financial rescue agreements be scrapped or rewritten.
The Communist Party declined to attend Tuesday’s talks and the extreme right Golden Dawn party was not invited.
New growth figures released Tuesday revealed the extent of Greece’s ongoing crisis, adding urgency to the coalition talks as an extended deadlock would trigger fresh elections.
The country’s economic output slowed by 6.2 percent in the first quarter of 2012, compared with the first three months of 2011, according to the Greek Statistical Authority.
The lack of government has also caused concern about how Greece would decide to handle an outstanding 435 million euro bond that matures today. The bond’s investors had held out against a massive debt restructuring Greece had agreed with private creditors in March, which saw holders of Greek debt swap their bonds for new ones with later maturity dates and lower interest rates.
The conservative New Democracy party won the May 6 election, but only received 18.9 percent of the vote as angry voters scattered to smaller parties. Second-placed Syriza, which received 16.8 percent in the election, is currently leading opinion polls. It received just 4.9 per cent in the 2009 election.
