New Greek Elections Called as Left Holds Firm Against Austerity Drive

Coalition talks among the Greek political parties collapsed officially today in Athens and new parliamentary elections have now been called for next month.

With over 70% of Greeks opposing an agreement that would dictate deep wage, pension and public spending cuts in exchange for ongoing bailout funds from the EU and the IMF, leftist parties Syriza and the smaller Democratic Left, refused to cave to pressure from the Socialist and New Democracy parties to forge a coalition. Instead, they welcomed new elections and renewed their promises to fight off the draconian austerity measures driven by Germany and other financial power-brokers in Europe.

German finance minister Wolfgang Schauble was the first foreign politician to comment on the collapse of coalition talks. He insisted that little had changed, reports The Guardian (with ongoing coverage here), and that Greece must stick to the terms of its aid package. Speaking from Brussels, Schauble said, "If Greece....wants to stay in the euro then they have to accept the conditions." Schauble added that Europe needs a Greek government that is able to make decisions.

It appears, however, that Greek's leftist parties are making decisions, though perhaps not the ones that European bond holders or private banks, would like.

Syriza, or Radical Left Coalition, surprised international observers in Greek elections earlier this month, campaigning strongly on an anti-bailout platform and calling for austerity measures to be cancelled. The party's leader, Alexis Tsipras, popularity has only risen since, with Syriza leading every poll for a new election with anything from 20 to 27 per cent. This continued strength and popular support has worried financial markets and sent shivers down the spines of those who oppose a potential Greek exit from the Eurozone.

With the euro crisis escalating, the focus this evening will switch to Berlin, where Chancellor Angela Merkel is due to meet newly-elected French President Francois Hollande, who has pledged to challenge the German-led focus on austerity, and to call for growth stimulus measures to tackle the debt crisis.

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Reuters: Greece calls new election after coalition talks fail

Greece has lurched from one crisis to the next over the past two years, with growing public anger over soaring unemployment and falling living standards as the country endures its fifth year of recession.

Nearly one in five Greek workers has no job, while protests, riots and highly public suicides have become common in an increasingly volatile social climate. [...]

Polls show the leftist SYRIZA party, which rejects the bailout and came second on May 6, is now on course to win a new election, a result that would give it an automatic bonus of 50 seats in the 300-seat parliament.

The party's charismatic 37-year-old leader Alexis Tsipras has soared in popularity by promising Greeks a future in the euro zone without the yoke of austerity - horrifying European leaders who say the country cannot have its cake and eat it too.

While most Greeks oppose the bailout terms, they overwhelmingly back the euro. Nearly 80 percent want a new government to do all that is needed to keep Greece in the euro, a recent poll showed.

European leaders say Athens can remain in the euro only if it sticks to the promises to clean up its finances that it made to secure the bailout. Opponents say those harsh terms are making the situation worse by strangling the economy, which latest data show shrank over 6 percent year-on-year in the first quarter.

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The Age: Unity Talks Flop

Continued attempts to form government in Greece came as France's new President, Francois Hollande, elected on an anti-austerity pledge, was sworn in as head of state in Paris last night.

He then flew to Berlin to meet pro-austerity German Chancellor Angela Merkel.

Meanwhile, leading European Union finance officials promised to stand by Greece as a member of the eurozone provided it stuck to its bailout terms and stayed the course of its painful austerity program. [...]

In Athens, the prospect of talks producing a successful outcome had been quashed by the small Democratic Left party.

Athens' political impasse, the result of inconclusive elections on May 6, could not be resolved, a senior party member said, because the Democratic Left was unable to join an administration that did not reflect ''the majority of Greek society''.

''The last thing Greece needs is another round of elections but that is what is going to happen. We have decided that we cannot participate in a government that does not reflect the majority will of Greek society,'' said Dimitris Hadzisokratis, who sits on the party's executive board.

''I say this with a heavy heart. We would have preferred otherwise,'' he said, adding that nearly 70 per cent of Greeks had voted for political groups that opposed the policies the new government would be forced to adopt under pressure from the EU and IMF.

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