Monday 18 December 2017

Desperate final appeal in Athens to avoid new vote

Daniel Howden in Athens

Greece's search for a government to prevent the country's disorderly exit from the euro went on into last night with little sign of an agreement.

After a week in which party leaders have failed to form a coalition, it fell to the Greek president to make a final appeal to politicians to avoid fresh elections and prevent an extended period of uncertainty.

Karolos Papoulias met yesterday morning with the heads of the three biggest parties after last week's elections, without making any apparent breakthrough.

Hopes hinged on a last-minute change of mind from Fotis Kouvelis, who leads a moderate left group which could help the conservatives and socialists, who came first and third, to get the parliamentary majority needed to govern.

Should no agreement be found then Greece is expected to vote again -- with June 17 being the likely election date -- under intense pressure over its future in the eurozone.

The campaign would be dominated by a clash between parties who believe Greece must meet the terms of its loan agreements with international creditors in order to stay in the single currency and others who claim that those agreements can be scrapped without falling out of the euro.

"Greeks are caught with a mountain of debt behind them and the cliff's edge of exit from the euro in front of them," said Theodore Pelagidis, a professor of economic analysis at the University of Piraeus.

The author of a book on understanding the crisis, he said the same 'clientelism' that had taken over Greek politics had caused a breakdown in the education system, leaving many Greeks unable to understand the crisis.

"They don't have the tools to understand the reality," he said. "They just want to go back."

The ECB and Greece's EU partners have warned Athens no substantial renegotiation of the most recent €130bn bailout will be allowed. At the same time signals have been sent to the markets that the eurozone could withstand a Greek exit.

The country's collapsing economy and continuing pressure for more cuts and reforms from the Troika have exploded Greece's two-party system and led to the rise of the radical left coalition party Syriza, under its young leader Alexis Tsipras.

Mr Tsipras, aware that his party is climbing in the opinion polls, has resisted all efforts by other party leaders to draw him into the coalition.

Communist

He is accused of using the two-day mandate he was given last week to form a government to begin his campaign for fresh elections rather than make any effort at unity. His party, with its second-place finish and 52 seats, would add much-needed legitimacy to a new government.

The conservative New Democracy and socialist Pasok parties, uneasy partners in Greece's unity government before the elections, could achieve a parliamentary majority of 168 seats if they were able to persuade the Democratic Left to join them.

A former communist party activist, Mr Tsipras has refused to contemplate any support for the austerity agenda. The 38-year-old invited the two main historical parties to join a government, but only on condition that they sign a letter formally rejecting the memorandum deal with Greece's creditors and apologising for their role in driving the country deep into crisis.

euro crisis: See Business

Irish Independent

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