Successful votes against austerity from Greece to France have pushed officials to consider other ways to cope with the debt crisis in the euro zone, with the International Monetary Fund (IMF) signaling an increase in flexibility even as investors get jumpy over the outcome.
One area of concern, according to a Reuters report Tuesday, was Greece’s failure to create a governing coalition out of the disparate parties who won seats in the weekend election.
While Antonis Samaras, leader of the conservative New Democracy party, had three days to put together an alliance among the other parties, he bowed to defeat within only hours and handed back the job to the government. Although New Democracy had won the largest number of seats, angry voters had boosted representation by both the far left and the far right, and those parties were in no mood for compromise.
“I tried to form a coalition government with two goals: that the country remain in the euro and bailout policies change to include growth measures,” Samaras said in a statement. “I did what I could to get a result but it was not possible. As such, I have informed the president of the republic and handed back the mandate.”
Now the task of forming a coalition falls to Alexis Tsipras, leader of the Syriza party, which gained the second-largest number of seats. Tsipras, who was to meet with President Karolos Papoulias on Tuesday, according to Bloomberg, has said he will drive a bid to renegotiate the terms of Greece’s aid package.
Not only did the two main governing parties experience voter displeasure, but one of the groups that won representation has advocated sowing land mines on the Greek-Turkish border and another wants to force Germany to pay World War II reparations. Two other parties refused outright to meet with Samaras to discuss compromise. Tsipras will have three days to see if he can do better; if not, the task will pass to the Pasok party. Failure there will pass the task back to Greece’s president.
According to Citigroup, the Greek election results have boosted the risk of Greece leaving the euro by the end of 2013 to as high as 75%.