Greece’s political parties in last-ditch talks to agree a coalition

The mandate to seek coalition partners passed to Socialist leader Evangelos Venizelos, whose traditionally dominant Pasok party was hammered in Sunday’s poll, pushed into third place with just 13.2 per cent of the vote.

He is the third party leader to try to find an agreement.

Antonis Samaras, whose conservative New Democracy won the most votes, and runner-up Alexis Tsipras, who heads the Radical Left Coalition, or Syriza, have already tried and failed.

A major stumbling block has been Tsipras’s insistence that Greece’s tough austerity programme, which is part of its international bailout commitments, be cancelled or frozen. Both Samaras and Venizelos argue such a move would be catastrophic for the country, and would lead Greece out of the euro.

Venizelos has three days in which to seek some form of agreement, although since all the party leaders have already met during the previous two rounds, that looks unlikely.

“Things are not easy,” he said. “I am not declaring myself optimistic. But I am declaring myself responsible, and dedicated to this aim that I believe serves the national interest.”

If his efforts fail, President Karolos Papoulias will convene all the leaders in a last-ditch attempt to cobble together a coalition. If that is also unsuccessful, new elections will be called for early June, prolonging the political uncertainty.

In return for billions of euros in rescue loans from other European Union countries and the International Monetary Fund, Greece imposed harsh austerity measures that saw salaries and pensions slashed, tens of thousands of people lose their jobs and businesses close down.

The crisis in Greece, together with the election of a new president in France, have led to speculation that austerity measures could be eased as European leaders bid for a return to growth.

But German chancellor Angela Merkel yesterday said structural reforms alongside austerity remained the only way Europe could get through its financial crisis.

In a speech to the German parliament, she rejected calls to abandon or scale back austerity measures in certain countries that use the euro. Debt reduction and growth are the “two pillars” of the strategy needed to bring the bloc out of the crisis, she said.

She added: “Growth through structural reform is important and necessary – growth through debt would throw us back to the beginning of the crisis.”