Tue, May 15, 2012 - Page 1 News List

Greece hits stalemate as fears grow of a euro exit

Reuters, Athens

Greece’s president met little enthusiasm from political leaders summoned to a final round of talks yesterday to avert a new election, reinforcing fears the country was firmly on the path to bankruptcy and an exit from the eurozone.

Greece’s political landscape has been in disarray since an inconclusive election on May 6 left parliament divided between supporters and opponents of a 130 billion euro (US$168.3 billion) EU-IMF bailout, with neither side able to form a government.

After Sunday’s effort at cajoling party leaders into a coalition proved fruitless, Greek President Karolos Papoulias summoned four party leaders for a fresh round of talks yesterday evening.

However, the talks appeared doomed long before they began, as the young leader of the radical leftist SYRIZA party said he would not attend and another leftist leader refused to take part in any coalition unless SYRIZA was on board. Papoulias must call a new election if he fails to engineer a compromise.

With Greece set to run out of money as early as next month and no government in place to negotiate the next aid tranche, investors have begun betting that a long-speculated Greek default and eurozone exit will happen sooner rather than later.

The prospect of national bankruptcy and a return to the drachma appeared to be slowly sinking in among Greeks, who must now choose between the pain of spending cuts demanded in return for aid and an even more painful existence outside the euro.

“We have to stay in the euro. I’ve lived the poverty of the drachma and don’t want to go back. Never. God help us,” said Maria Kampitsi, a 70-year-old pensioner, who had to shut down her pharmacy two years ago because of the crisis. “They must cooperate or we’ll be destroyed, it will be chaos. For once, they must care about us and not their chair.”

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