Four days after Greek elections that left five anti-bailout parties seated in Parliament, a ruling coalition still has not emerged. As first one, then another of the party leaders has abandoned the mandate to come up with a group that will work together, Evangelos Venizelos, head of the Pasok party, has now inherited the challenge.
Venizelos, who worked to bring about Greece’s second bailout, is now faced with a task that looks increasingly unlikely as the possibility rises that Greece will instead depart the euro zone.
Bloomberg reported Thursday that after the sequential failure first of Antonis Samaras and then of Alexis Tsipras to make any headway, the job fell to Venizelos—leader of one of the only two parties that back the bailout. Pasok, which finished third in the election, had partnered with Samaras’ New Democracy party to preside over the terms of the second rescue.
However, even though New Democracy finished first on Sunday, between them the two parties fall two seats short of a majority, making it necessary to seek support from another party in order to get anything done. Since Greek voters soundly rejected the bailout in voting in an assortment of groups opposed to it, that has proved to be thus far impossible.
While Greece is set to receive another 5.2 billion-euro ($6.7 billion) tranche of rescue funding at the end of June, confirmed Wednesday by the European Financial Stability Facility (EFSF), and 4.2 billion euros were provided on Thursday, the last billion is set to be provided depending on the country’s needs.
The terms of its bailout require it to come up with another 11 billion euros in cuts in June, and Deputy Foreign Minister Michael Link of Germany said Wednesday that Greece will not need further funding till July.
Although Germany is talking tough on Greece adhering to the original terms of the bailout, with Chancellor Angela Merkel quoted speaking out against funding economic growth through anything other than “structural reform,” talk is building of a Greek exit from the joint currency.
Merkel said Thursday, according to Bloomberg, “To say this unequivocally: growth through structural reform is sensible, important and necessary. Growth funded by debt—that will just lead us back to the beginning of the crisis. We can’t do that and we won’t do that.”
Finance Minister Wolfgang Schaeuble of Germany said on Tuesday, “If Greece decides not to stay in the euro zone, we cannot force Greece. They will decide whether to stay in the euro zone or not.”
In a statement, Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said of the situation, “Politically speaking, Greece is already out of the euro zone. The only question is about the timing and disorderliness of its exit.”