Lacking leader, Greece's EU future in jeopardy

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ATHENS – Talks to form a government following elections with no clear winner collapsed Wednesday and left in limbo Greece's future in the European Union and its commitment to an international bailout of its debts.

By Louisa Gouliamaki, AFP/Getty Images

Syriza coalition leader Alexis Tsipras, outside his Parliament office Wednesday, wants austerity measures revoked.

By Louisa Gouliamaki, AFP/Getty Images

Syriza coalition leader Alexis Tsipras, outside his Parliament office Wednesday, wants austerity measures revoked.

The biggest vote-getter in Sunday's elections, the conservative New Democracy, said that the intransigence of the leader of the second-largest vote-getter, the left-wing Syriza coalition, would mean Greece will be forced out of the coalition of nations that use the euro as a currency, known as the eurozone.

"He needs to come to his senses," New Democracy leader Antonis Samaras said of Syriza leader Alexis Tsipras.

New Democracy took 19% of the vote in Sunday's elections and Syriza received 17%, meaning neither can lead the government without the help of other parties. Talks between Samaras and Tsipras to form a government together broke down over the issue of bailout in which Greece must slash its spending to qualify for money from the EU, European Central Bank and International Monetary Fund.

Syriza is demanding revocation of the deal's so-called austerity measures requiring Greece to cut public salaries and benefits, pointing out that more than 60% of Sunday's vote went to parties demanding an end to the austerity measures.

EU ministers said Wednesday that Greece would get no more payments from the $170 billion deal approved in March if it did not enact roughly $15 billion in cuts by June. Samaras and others point out that polls have shown that Greeks want to remain in the eurozone, and to do so means going along with the bailout.

Costas Lapavitsas, professor of economics at University of London, said the standoff between the two parties reflects the contradictory positions of Greek people.

"On the one hand, you have vast anger and frustration, and yet (no one) is really offering a new direction; they are just rejecting everything that has happened so far," he said. "People are frustrated and angry but when you ask them what else should be done they can't give you a straight answer — there is no clear, coherent alternative they are subscribing to."

Despite the EU's position, Tsipras refused to back down from his demand that Greece renegotiate the austerity terms, which he has called "monstrous." He said he would tell the EU's leadership in Brussels that the agreement is null-and-void. If no party can form a government, new elections are likely next month.

Greece is due the next payment from the bailout today in the amount of $7 billion. Without it, the country would run out of money to pay its debts, which could rattle European economies and force Greece out of the eurozone.

"Austerity and recession have led to the shoring up of the anti-EU and anti-democratic parties," said Dimitris Charalambis, professor of political science at the University of Athens. "If Greece continues on this path, it will have left the eurozone by its own actions."

Greek leaders on the left and right opposed to the bailout say many economists agree that the austerity measures are hurting Greece's ability to grow revenue and pay off its debts on its own.

Greece has imposed numerous tax hikes and cuts to welfare and pensions, yet the economy has contracted by 20% over the past four years and the unemployment rate is close to 22%.

"They've failed. … They're still using the same tricks the last 30 years," said Giannis Giarabis of Athens. "How stupid do they think we are?"

Bhatti reported from Berlin.

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