Greek left gets shot at forming government

Greek left gets shot at forming government

Athens, Greece (CNN) -- A left-wing coalition that opposes austerity will try to form a new government in Greece starting Tuesday, after the center-right party that came first in elections gave up on Monday.

Alexis Tsipras, the leader of the leftist Syriza coalition, is due to meet the Greek president on Tuesday and then start coalition negotiations.

Syriza, which opposes the unpopular budget-cutting measures imposed on Greece in exchange for a European bailout, will have three days to form a government.

The party came in second place in elections that left the Greek political scene in chaos, with seven parties getting seats in parliament and no party capturing more than 19% of the vote.

The Greek stock market was down about 5% Tuesday, its second day of falling, amid concerns that Sunday's election could prompt Greek leaders to reconsider the austerity deal.

Greek elections came the same day that French voters kicked out President Nicolas Sarkozy in favor of Socialist Francois Hollande, who spoke out against austerity in his victory speech on Sunday.

Greece's main center-right party failed to form a coalition government Monday, adding yet more uncertainty to the debt-ridden country's political situation.

New Democracy leader Antonis Samaras said he did "everything possible" to form a coalition, but that none of the parties agreed to join with his party, which won first crack at forming a government after finishing first in Sunday's parliamentary elections.

Politicians have until May 17 to come up with a new working alliance or, if they cannot, set a date for another round of elections.

The radical leftist coalition Syriza made a strong second-place showing in the election, more than tripling its parliamentary representation to 51 seats out of 300.

Tsipras left little doubt Sunday about what direction his party would take in a new government.

"European leadership and especially (German Chancellor Angela) Merkel have to understand that austerity policies have suffered defeat," Tsipras said Sunday.

He called the election results "a message of a peaceful revolution."

Sunday's election results were widely seen as a message to politicians to back away from the harsh economic austerity measures imposed in Greece.

A European Commission spokeswoman said Monday that Greece needs time to work through its political process but reminded the country's leaders that they would be expected to abide by terms of a bailout program meant to avoid a crippling financial meltdown.

"The commission hopes and expects that the future government of Greece will respect the engagements that Greece has entered into," spokeswoman Pia Ahrenkilde Hansen told reporters.

New Democracy finished first in Sunday's voting, but with just 19% of the vote, giving it 108 seats in Greece's 300-seat parliament.

Voters also delivered a rebuke to PASOK -- New Democracy's socialist partner in the outgoing coalition government -- stripping the party of 119 seats.

Together, the parties fell short of the 50% necessary to continue the coalition, requiring formation of a new government.

Last year, Greece's debt threatened to force it to drop Europe's common currency, the euro, prompting the European Central Bank and other lenders to swoop in with emergency funding. In exchange, they demanded that the government slash spending.

The resulting measures have led to tax increases and cuts in jobs, wages, pensions and benefits -- and significant public outcry.

The national unemployment rate for January, the latest month for which figures are available, was nearly 22%, prompting widespread protests and leading some young people to leave the country in search of work.

Youth unemployment is even higher than the national average of one in five out of work.

Furthermore, for the past two years, the country's massive amount of debt has threatened the stability of the 17-country eurozone.

Greece pushed through a huge debt swap in March to save it from disorderly default and clear the way for it to receive a second bailout from the European Union, the European Central Bank and the International Monetary Fund, worth €130 billion ($171.5 billion).

The debt restructuring deal gave some breathing space to the eurozone bloc, where fears that Greece might collapse had increased pressure on other debt-laden nations such as Spain and Italy.

The tribulations of New Democracy and PASOK were matched by triumphs of a number of other parties that were also-rans and in some cases nonexistent just a few years ago, propelled by voters angry about stringent austerity measures.