Greece’s New Democracy seeks bailout coalition

Conservative leader Samaras starts search for alliance partners

Antonis Samaras, the conservative New Democracy leader

Athens, June 18
Greece’s conservative leader began talks to form a government on Monday after winning an election that sets him the task of imposing punishing austerity measures in a near-bankrupt economy while containing rising social tensions.

New Democracy conservative leader Antonis Samaras was due to meet Evangelos Venizelos, the head of the Socialist PASOK party, after he received a mandate to form a government from the President.

The once-mighty PASOK, now reduced to third place after the dramatic rise of the radical leftist anti-bailout party SYRIZA, said it would support Samaras but had not yet decided whether to join the government or just offer parliamentary backing.

Samaras’s narrow defeat of SYRIZA caused relief across the euro zone, where countries had said Greece’s future in the single currency depended on its meeting conditions attached to a bailout, which SYRIZA had vowed to tear up.

If SYRIZA had won, and claimed the 50 extra seats in parliament for the party that placed first, it would have been impossible to form a government supporting the bailout.

European leaders viewed Samaras’s victory as an aversion of catastrophe. But any relief in financial markets vanished within hours as a rally on Monday quickly reversed.

Samaras still wants a better deal from Europe. He said Greece would meet its bailout commitments, but added: “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.”

The small Democratic Left party indicated it would be ready to support Samaras if the bailout deal could be softened. SYRIZA leader Alexis Tsipras again ruled out joining a pro-bailout coalition government.

Germany, the euro zone’s paymaster, gave little sign it was willing accept more than minor changes to the timing of some targets in the 130 billion euro ($164 billion) rescue agreed with the European Union and International Monetary Fund.

In deep recession, crushed under its huge public debt and forced to slash public spending and hike taxes repeatedly, Greece is struggling to restore its near-bankrupt economy. A new government could face protests soon after taking office.

What next govt hopes to change

n Greece is on track to get a new coalition government composed of the two parties that broadly back its bailout from European partners and the IMF

n The conservative New Democracy, which will lead the coalition, and its expected minority partner, the Socialist PASOK party, have both said they want to renegotiate the bailout deal to soften its impact on the country's severe recession

n The Greece's new government will want to renegotiate with the so-called "troika" of the European Union, the International Monetary Fund and the European Central Bank.