Greek Talks Fail, Prompting a New Election

Posted May 15th, 2012 at 1:25 pm (UTC-5)
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Talks aimed at resolving the political crisis hanging over debt-plagued Greece have fallen apart.

A statement Tuesday from the office of Greek President Karolos Papoulias declared the talks a failure. And Socialist PASOK party leader Evangelos Venizelos says the country will now have to hold fresh elections. That vote could be held next month.

Political leaders had been gathering for a third day of talks in an effort to form a new coalition government. President Papoulias had proposed forming a technocratic government run by distinguished experts and academics, instead of politicians and bureaucrats.

At the center of the debate is the unresolved question of whether Greece will comply with the austerity measures it agreed to with its European neighbors in exchange for approval of the country's second financial bailout in the last two years.

The ongoing stalemate has led to rising concerns among eurozone financial ministers that Athens will not uphold its commitments and eventually will leave the 17-nation bloc that uses the euro currency.

The chief of the International Monetary Fund, Christine Lagarde, told a French television station that a Greek departure from the eurozone would be “quite messy,” but that if it occurs, it should be an “orderly exit.”

The eurozone finance chief, Luxembourg Prime Minister Jean-Claude Juncker, dismissed the prospect Monday after a meeting with his counterparts in Brussels, calling the speculation “propaganda.”

Mr. Juncker suggested the eurozone could extend the deadlines reached in the previous agreements, as long as the new government remained committed to its targeted budget cuts.

Political leaders had been struggling to put together a coalition government since last week's parliamentary elections resulted in a deadlock, as voters angrily rejected austerity pacts the previous government reached with the European Union. None of the three top parties won enough seats to form a government on its own.

The three parties — the conservative New Democracy, the radical left Syriza, and the socialist PASOK — were each given a chance to form a coalition. But none of them was able to find enough support to put together a new government.

The economic measures include deep spending cuts, tax hikes, pension cuts, and eliminating thousands of government jobs. Greeks have taken to the streets in sometimes violent protests against the bailout requirements.