Discussions on forming a new government have been held in Greece following the success of the pro-bailout New Democracy party in elections – and a deal is likely to be agreed on Tuesday.
Antonis Samaras, the leader of New Democracy, has been given three days to form a government by the Greek president and talked to the Pasok, Democratic Left and Syriza parties on Monday.
His centre-right party and centre-left Pasok should be able to form a majority govenment, which is likely to take shape on Tuesday according to an unnamed New Democracy official who has spoken to Reuters. The official said: “We are going to clinch a deal tomorrow, we will form a government.”
Pasok members are expected to be appointed to the new cabinet, while the smaller Democratic Left party said it would also support a New Democracy-led coalition as long as certain conditions were met.
The far-left Syriza party, which came second in the elections and is opposed to the terms of the EU/IMF bailout, has ruled out joining the government.
Mr Samaras said: “There must be a government of national salvation with as many parties as possible.”
Following inconclusive elections in May, Syriza leader Alexis Tsipras said a government needed to be formed soon, with his party taking on the “very significant role of the national opposition”.
Had Syriza won and carried out its policy of seeking to renegotiate the bailout, vital funding to keep Greece going could have been cut off, threatening the country’s membership of the euro and sparking wider contagion across southern Europe.
There must be a government of national salvation with as many parties as possible. Antonis Samaras, New Democracy
During the campaign, Mr Samaras also said he would seek concessions from the EU and IMF, but Mr Tsipras said he had not repeated that since the elections.
“I noted that yesterday I did not hear the words renegotiation coming from his lips even though it was something he kept saying since 6 May and up until the elections. I hope it was a mistake. I only heard about sticking to commitments and signatures.”
But Mr Samaras said: “We will simultaneously have to make some necessary amendments to the bailout agreement, in order to relieve the people of crippling unemployment and huge hardships.”
Pasok, which came third in the poll and supports the bailout, said it would back New Democracy, but had not decided whether to join the government or just give the party parliamentary aid.
New Democracy’s narrow win was welcomed across the eurozone, where there were fears that victory for anti-bailout parties could have forced Greece out of the euro.
“The result showed people want the euro, but society remains divided. Syriza will be a militant opposition, possibly complicating the new government’s efforts,” a senior New Democracy official said on condition of anonymity.
“The new government must deliver a positive development soon – an easing of the bailout terms or a positive sign in the economy – or people will lose trust in a week.”
German Foreign Minister Guido Westerwelle said the substance of the bailout agreement was “not negotiable”, but he said creditors might be willing to offer some flexibility on timing for some of the targets set for Greece.
The markets responded positively to the results, although this optimism was short-lived and Spanish and Italian borrowing costs rose.
Greek elections: 'Crisis postponed, not averted'. With pro-bailout parties discussing the formation of a new government in Greece, Channel 4 News looks at what happens next in the euro saga.
Political leaders in Europe insist Greece enact spending cuts promised in return for 240bn euros ($305bn) in rescue packages since 2010 while holding out the possibility of granting extra time to meet targets for narrowing the budget deficit.
The campaign was watched closely by global leaders and markets, while central banks stood ready to intervene in case of financial turmoil, as Sunday’s election was seen as a vote on whether Greece should stay among the 17 nations that use the euro.
A Greek exit would have potentially catastrophic consequences for other ailing European nations; the fallout would hit the United States and the entire global economy.
Leaders of the European Union were relieved that a pro-austerity government had a good chance now of being formed.
“Continued fiscal and structural reforms are Greece’s best guarantee to overcome the current economic and social challenges,” European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso said in a joint statement.
Germany’s Chancellor Angela Merkel also rang Mr Samaras to congratulate him on his victory.
President Barack Obama’s press secretary, Jay Carney, welcomed the Greek vote, adding: “We hope this election will lead quickly to the formation of a new government that can make timely progress on the economic challenges facing the Greek people.”