Coalition talks in Greece remained
deadlocked Wednesday, prompting German and European Union warnings to
anti-austerity politicians in Athens that the only alternative to the
budget cuts they oppose was economic meltdown.
Alexis Tsipras, the leader of the leftist Syriza party who is
tasked with forming a government, was criticized for suggesting that
mainstream parties should reject international bailouts and initiate
a default on debt repayments.
Tsipras sent letters to officials in Brussels saying Greece was no
longer bound by its pledges to impose new cutbacks, including 11.5
billion euros ($15 billion) of savings to be approved by June,
since the austerity deal had lost popular support.
If the cuts are not approved, the E.U. and International Monetary
Fund (IMF) are threatening to withhold 29 billion euros of the
173 billion-euro bailout Greece was granted in March.
Conservative New Democracy leader Antonis Samaras said such a move
would be catastrophic and eventually force Greece out of the
eurozone.
"Denouncing this agreement, as proposed, will lead to the
immediate collapse and bankruptcy (of Greece) as well as the
inevitable exit from Europe," Samaras said, adding that he was
seeking to create a broad center-right front that would guarantee the
country remained in the euro.
German Finance Minister Wolfgang Schaeuble, speaking in Brussels,
said reopening discussions on the E.U.-IMF bailout "would immediately
incur catastrophic uncertainties in the financial markets."
At a panel organized by German broadcaster WDR for Europe Day,
Schaeuble said he was convinced that "the great majority of Greeks
want to stay in the eurozone, because the Greeks know that the
alternative would not be pleasant for Greece."
Remaining in the eurozone meant respecting the bailout terms,
Schaeuble said. "If Greece wants to stay there is no better way than
the one we have negotiated. You can't have the one without the
other."
"What I've had to hear in the last few hours from some politicians
in Greece, I find very worrying," German Foreign Minister Guido
Westerwelle said at the same event. "Greece must now decide for
itself which path it wants to take."
E.U. President Herman Van Rompuy warned that an exit from the
eurozone and the EU would not save Greece from the pressing need to
tackle its economic problems.
"Reforms are necessary, whether with Europe or without. A deficit
of 15 per cent and debts of 160 per cent of gross domestic product
are not acceptable, with or without the E.U.," Van Rompuy said.
Tsipras was scheduled later Wednesday to meet both Samaras and
socialist Pasok leader Evangelos Venizelos, as well as other party
leaders, in a last bid to form a coalition government.
Voters punished mainstream New Democracy and Pasok for their
handling of the financial crisis, which has forced the country into a
fifth year of recession and brought on record unemployment.
Syriza became the second-largest party in parliamentary elections
at the weekend, winning nearly 17 per cent of the vote.
But the leftist party needs the support of New Democracy - which
won the most parliamentary seats - or Pasok in order to form a
majority government.
Despite coming top in the polls, Samaras was unable to form a
government and the mandate was passed on to Tsipras. If he also
fails, the mandate passes to the leader of Pasok, which came third.
If he is also unsuccessful, party leaders will make a final effort to
reach consensus.
If no coalition can be found, new elections will be held in June,
leaving the political instability hanging over the country's hopes of
staying solvent and within the eurozone.
