Greece election: Coalition talks set to resume

New Democracy leader Antonis Samaras, 18 JuneTalks between three parties on forming a new coalition government in Greece are set to resume on Wednesday, amid intense international pressure.

New Democracy, the conservative winner of Sunday’s election, is expected to lead the new government.

Pasok leader Evangelos Venizelos said a government could be formed by midday (09:00 GMT) on Wednesday.

New Democracy leader Antonis Samaras’s three-day mandate to form a government expires on Wednesday.

It is unclear whether Pasok, which came third in the vote, will join the government, or merely support it.

The third party is Democratic Left. Between them, the three parties would have a majority of 29 seats in parliament.

They all favour keeping Greece in the euro while wanting to renegotiate terms of its EU-IMF bailouts, although they differ on the extent.

However, European leaders have indicated that there is limited room for manoeuvre and are expecting details on how the new government intends to make another 11.7bn euros (£9.4bn; $14.8bn) of cuts by 2014.

New Democracy won 129 seats in Greece’s 300-seat parliament on Sunday, followed by the radical anti-bailout party, Syriza, with 71, Pasok with 33 and the Democratic Left with 17.

Pressure

World powers have urged Greece to move swiftly to form a government.

Bailout deal – Greek pledges

  • Cut 15,000 state sector jobs this year – aiming for 150,000 to be cut by 2015
  • Cut minimum wage by 22%, to about 600 euros a month
  • Pension cut worth 300m euros this year
  • Spending cuts of more than 3bn euros this year
  • Liberalise labour laws to make hiring and firing easier
  • Boost tax collection
  • Carry out privatisations worth 15bn euros by 2015
  • Open up more professions to competition, eg in health, tourism and real estate
  • Greece aims to cut its debt burden to 116% of GDP by 2020

Speaking after talks between the three parties in parliament on Tuesday, Mr Venizelos said a government “must be formed as soon as possible”.

He said his party would support the government “wholeheartedly”, but had not yet decided what form its participation would take.

If Mr Samaras fails to form a government by the deadline on Wednesday, Syriza would be given a chance, followed by Pasok.

But Syriza leader Alexis Tsipras has said he will not even attempt to do so. He has also refused to join a government led by New Democracy.

Two international bailouts have been awarded to Greece, an initial package worth 110bn euros (£89bn; $138bn) in 2010, then a follow-up last year worth 130bn (£105bn; $164bn) euros, but they come with tough austerity measures attached.

Greece has also had 107bn euros (£86bn; $135bn) of debt, held by private investors, written off.

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