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Greeces political deadlock set to continue for a second week

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Greeces radical leftist leader spurned an invitation from the president for a final round of coalition talks on Monday, all but ensuring a new election that he is poised to win.

According to Reuters, Greeces political landscape has been in disarray for a week since an inconclusive election left parliament divided between supporters and opponents of the 130 billion euro EU/IMF bailout, with neither side able to form a government.

President Karolos Papoulias must call a new election if he cannot persuade them to compromise. After a day of fruitless negotiations on Sunday, he invited politicians from the biggest three parties to return to the presidential mansion on Monday, along with a small leftist group.

But an official from the second biggest party, the radical leftist SYRIZA group, said its 37-year-old leader Alexis Tsipras would not attend.

The anti-bailout vote was divided among small parties but has now rallied behind Tsipras, who emerged as an overnight sensation. Polls show he would now place first if the vote is repeated, a prize that comes with a bonus of 50 extra seats in the 300-seat parliament.

He has consistently refused to join a coalition government with the establishment conservative and socialist parties that ruled Greece for decades but were punished by voters last week for their role in agreeing the EU rescue, which requires deep cuts in wages and pensions.

Tsipras says he wants to keep Greece in the euro but the bailout must be torn up. European leaders say that would require them to cut off funding, allow Greece to go bankrupt and eject it from the European single currency.

After meeting with Papoulias and the conservative and socialist leaders, Tsipras said of their coalition offer: "They are not asking for agreement, they are asking us to be their partners in crime and we will not be their accomplices".

Socialist leader Evangelos Venizelos said he was nonetheless holding on to hopes that a deal could still be salvaged, but warned time was running out. "Despite the impasse at the meeting we had with the president, I hold on to some limited optimism that a government can be formed," said Venizelos, whose PASOK party finished a humiliating third in the election, a shadow of its former might. "The moment of truth has come. We either form a government or we go to elections."

The leader of the smaller, moderate Democratic Left party, Fotis Kouvelis, will attend Mondays talks, his party said. He commands enough seats to provide the conservatives and socialists with a majority, but has repeatedly said he would not join a coalition without Tsipras.

All seven political parties that won seats in last weeks election were given audiences with the president on Sunday, demonstrating the radical transformation that has taken place in just a week after generations of stable two-party rule.

Among parties Papoulias was obliged to meet was the far right Golden Dawn, in parliament for the first time. Many Greeks watched in shock as the president, a revered 82-year-old veteran of the World War II anti-Nazi resistance, received the leader of a group whose members give Nazi-style salutes.

Papoulias, shown on TV smiling with other leaders, was stony faced when seated opposite Golden Dawns Nikalaos Mihaloliakos. Journalists at the mansion sat on the ground in protest when Mihaloliakos entered and refused to ask questions when he left.

Supporters of the two establishment parties will be hoping that if a new election is held, Greeks will be frightened of the prospect of leaving the euro and return to the fold.

Polls show an overwhelming majority of Greeks reject the bailout but want to keep the euro - a position regarded in Brussels as untenable. As many as 78.1 percent want the new government to do whatever it takes to keep their country in the currency, a poll by Kappa Research for To Vima daily showed.

But Europe is running out of patience. The front page of Germanys influential Der Spiegel magazine headlined: "Acropolis, Adieu! Why Greece must leave the euro."

European officials who once refused to discuss the possibility of Greek exit from the euro now talk about it openly as a real, if painful, possibility.

"Divorce is never smooth," European Central Bank policymaker Luc Coene told the Financial Times. "I guess an amicable divorce - if that was ever needed - would be possible, but I would still regret it."
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