Fresh
talks in Greece as fears of euro exit grow
Markets around the
world have fallen over fears the political turmoil could lead to Greece leaving
the euro
Greece crisis
Further talks are due in Greece amid a
scramble to try to secure a workable government following inconclusive
elections nine days ago.
Leftist parties have signalled their
opposition to joining a coalition that would stick to unpopular austerity
policies in exchange for bailouts.
The president has proposed a government
of technocrats, but party leaders are pessimistic any deal can be reached.
The political turmoil has spooked
markets around the world.
Heavy losses in Europe and the US on
Monday were followed by falls in Asia on Tuesday morning.
If the cliff-edge talks fail, Greece
will face fresh elections, prolonged political instability and possibly a slide
towards an exit from the euro.
The stakes could not be higher, says
the BBC's Mark Lowen in Athens. If Greece leaves the euro, the whole
ideological framework governing monetary union could begin to unravel.
Such a scenario was rejected as
"nonsense" by the chairman of the eurozone group, Luxembourg Prime
Minister Jean-Claude Juncker, on Monday - but commentators say the fact that it
is being openly discussed means a taboo has been broken in Brussels.
Analysis
Mark Lowen BBC News,
Athens
Greece's wait goes on. One proposal
under discussion is that of the president to form a government of technocrats,
made up of what are described as "distinguished and non-political
figures".
That has received a mixed reaction from
some parties, aware that many Greeks resent the country's outgoing prime
minister for being an appointed technocrat rather than an elected leader. But
the politicians appear too divided to serve together in a coalition - split
over whether to adhere to or reject Greece's bailout agreement and further
cost-cutting.
If these last-ditch talks fail, Greece
will face fresh elections, prolonged political instability and possibly a slide
towards an exit from the euro. Greece's president appears determined to try
everything he can to avoid it.
The tumbling euro means other countries
risk spiralling into further crisis. Borrowing costs in Spain are nearing
dangerous levels, correspondents point out.
Coalition
elusive
Tuesday's talks come in the wake of
Monday's discussions between the leaders of the centre-right New Democracy,
Pasok and moderate Democratic Left parties which ended in failure after just an
hour.
The left-wing Syriza bloc - the second
largest in parliament - did not attend the talks, saying it would not join any
coalition making further cuts. It rejects the terms of the latest 130bn-euro
(£105bn; $170bn) EU/IMF bailout, which demands more austerity.
Democratic Left, which could have used
its handful of seats to cement a majority government, has instead insisted it
will not join any coalition which does include Syriza.
All four parties are due to attend
Tuesday's talks, and local media said the Greek Independent party would also
take part - meaning only the Communists (KKE) and far-right Golden Dawn will be
absent.
President Karolos Papoulias has
proposed a technocratic government made up of what are described as
"distinguished and political figures".
But many Greeks resent the fact that
the outgoing Prime Minister Lucas Papademos - who oversaw the implementation of
the bailout - was appointed and not elected.
But Syriza and the Democratic Left have
expressed opposition to the suggestion, while Pasok leader Evangelos Venizelos
has said he is "not optimistic" agreement will be reached.
Our correspondent in Athens says the
chances of success at this 11th hour are slim.
Failure would mean fresh elections
which, polls suggest, could usher in a Syriza-led government that turns its
back on Greece's bailout.
That could lead the country into a
default on its debt and hasten Greece's departure from the euro, our
correspondent says.
Eurozone finance ministers meeting in
Brussels on Monday reaffirmed their commitment to Greece staying in the euro.
But they warned Athens must stick to
the terms of the bailout if it wants to receive further injections of funds to
stave off state bankruptcy and retain the single currency.
Are you in Greece? How do you feel
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