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Greek president in final bid to broker coalition

Associated Press Published: May 12, 2012

ATHENS, Greece (AP) — Greece's president convened the crisis-struck country's wrangling politicians Sunday in a final bid to broker an agreement for a coalition government and avoid new elections that will prolong the political uncertainty and threaten the country's euro membership.

Karolos Papoulias met initially with the heads of conservative New Democracy, radical left Syriza and socialist PASOK parties, who finished in the top three positions in elections last week that left no party with enough votes to form a government. He was then continuing with individual discussions with the heads of smaller parties that won enough votes to gain parliamentary seats, including the head of the extremist right-wing party Golden Dawn.

Week-long negotiations have so far failed to produce a result. If no government is formed, Greece must call new elections.

Voters furious at the handling of Greece's financial crisis and two years of harsh austerity measures taken in return for billions of euros in international bailout loans punished the formerly dominant parties in elections last Sunday. New Democracy and PASOK saw their support crumble to the lowest point in decades, while Syriza, led by 38-year-old Alexis Tsipras, made big gains to come in second place after campaigning on an anti-bailout platform.

The turmoil has alarmed Greece's international creditors, who have stressed that the country must stick to the terms of its rescue deals if it hopes to continue receiving the funds that have been keeping it afloat since May 2010.

Whether Greece should adhere to the strict austerity measures required for the bailout loans or pull out of the deal has been at the heart of the wrangling over the creation of the coalition government.

Tsipras insists any new government must cancel the austerity measures. He argues the terms are so onerous that they are giving the country's battered economy no chance of recovery.

But both PASOK head and former finance minister Evangelos Venizelos and New Democracy head Antonis Samaras have slammed Tsipras' position as irresponsible. They say his policies would lead to disaster and force Greece out of the European Union's joint currency — something that none of the political leaders say they want.

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