In Greece, coalition government proves elusive amid impasse

ATHENS — As it teeters on the brink of political chaos, Greece passed another day without a government after highly splintered elections that gave no party overall control of Parliament.

Politicians remained deadlocked Tuesday over how to handle Greece’s monumental debt crisis, fueling fear far beyond the country’s borders that it could collapse into financial mayhem and wreak untold consequences on the world economy.

Deepening the feeling of instability, the second-place finisher in Sunday’s elections, a staunch leftist, said he would try to stitch together a coalition government with the aim of tearing up Greece’s bailout agreements, a move that would spark a dangerous escalation of the euro debt crisis.

But a resolution to the standoff seems elusive, because the impasse has laid bare an uncomfortable reality now dawning on many Greeks: Their two chief political impulses are increasingly contradictory, with no apparent way to reconcile them.

Just ask Dimitris Vassiliou.

Like most of his compatriots, the 80-year-old retired state employee wants his country to remain one of the 17 nations that share the euro, which many Greeks see as a badge of their country’s maturity and its contribution to the cause of European unity. In a recent poll, 77% of respondents said they wanted their leaders “to do everything to keep Greece” in the club.

“We need to be anchored to the euro,” Vassiliou declared, as he chatted with a friend in downtown Athens, directly across from the Parliament building.

Yet on Sunday, he joined the millions of Greeks who delivered a resounding “no” to the stringent terms of two international bailouts the Greek government has accepted to avoid default after years of overspending. With their economy in free fall from brutal austerity cuts, a majority of voters cast their ballots for protest parties that have pledged to reverse those cuts.

“It’s the pain, it’s the anguish, it’s the anger and it’s the confusion,” said Vassiliou, who sat near a cypress tree where a pensioner committed suicide last month in a protest against austerity. “I really didn’t have an option.”

The problem is, Greeks like Vassiliou are now facing the hard fact that their paradoxical goals are fast becoming mutually exclusive. For all the eagerness of many Greeks to retain their Eurozone membership, Athens’ European partners have warned that any shirking of its obligations would imperil it.

“These things do not square up. They are irreconcilable points,” said Kevin Featherstone, an expert on Greece at the London School of Economics. “They’ve got to choose between the [bailout conditions] and membership of the Eurozone.”

They also must choose soon: International creditors expect Greece to detail yet another round of austerity cuts in June to qualify for its next installment of bailout loans, without which a chaotic default would loom large.

European stock markets suffered major drops in value Tuesday, in part because of the developments in Greece, whose market closed at its lowest level in nearly 20 years.

The dilemma facing Greece grew more acute Tuesday as the leader of its most successful anti-austerity party took a stab at trying to cobble together a coalition government.

Alex Tsipras’ hard-left Syriza group came in a surprising second place in Sunday’s elections, which saw voters ditch the two mainstream parties that many Greeks blame for having landed their country in its current financial hellhole.

Although one of them, the center-right New Democracy party, scored the highest share of the vote, nearly 19%, its leader gave up his bid Monday to form a government after trying for only six hours, which meant the baton passed to Syriza. (The Socialist party, Greece’s other traditional political powerhouse, came in third, an abysmal showing compared with its landslide victory three years earlier.)

Tsipras, 37, a brash and charismatic young leader who scoots around on a motorcycle and shuns neckties, embodies the central contradiction now riddling Greece.

He favors his country’s participation in the European Union and the Eurozone and says he wants to preserve it. But undermining that is his hard line against Greece’s rescue packages, which he says are driving it to ruin.

“The popular verdict clearly renders the bailout deal null,” Tsipras told reporters Tuesday.

He reiterated his complete rejection of the German-led response to Greece’s debt problems, outlining a five-point program that would cancel many of the measures taken by halting cuts to pensions and salaries, reversing reforms to the Greek labor market and suspending all public debt payments.

European officials were not pleased.

“The end of the debt policy has been agreed [to] in Europe,” German Foreign Minister Guido Westerwelle said in Berlin. “It has to stay that way.”

Although Tsipras’ tough stance is popular with many Greeks, it will also be difficult for him to muster the numbers necessary to form a government. The new legislature is Greece’s most fractured since the restoration of democracy nearly 40 years ago.

Anna Dosoula, a loyal conservative who this time swung her support over to Syriza, said Tsipras deserved a chance.

“Every other politician in charge has kowtowed to Europe’s demands,” she said. “Maybe it’s time we show some Greek spine, and maybe this kid can do it for us.”

If Tsipras fails, the task of forming a government will fall to the third-place Socialists, whose likelihood of success would be even more remote.

Many analysts predict a snap election in June to try to end the impasse.

“My own sense is that on Sunday, the electorate wanted … to punish an established political class that it held responsible for getting Greece into this mess,” Featherstone said. “The advantage of fresh elections is that the question shifts from punishment to a new question of, what are the solutions in the present?”

But even if new elections were to produce a more decisive result, or at least a government more willing to fulfill Greece’s bailout requirements, there would be precious little time to pass the new austerity measures expected of it.

And regardless, some analysts say, anger will still be running high among Greeks who have seen their living standards drop precipitously. The political climate has shifted so much over the last few months that even the party most identified with the bailout, the Socialists, has said it would try to renegotiate some of the conditions.

Some Greeks are hoping that the growing backlash against austerity throughout Europe — France just elected a new president, Francois Hollande, who is highly critical of austerity cuts — will aid their cause.

But whether nations such as Germany will yield is another uncertainty in a situation now full of them.

“We wanted to punish the politicians who were responsible for destroying Greece and mismanaging this country,” Vicky Panou, a 26-year-old lawyer, said in Athens. “We may have ended up, however, punishing ourselves, collectively, in the end.”

henry.chu@latimes.com

Times staff writer Chu reported from London and special correspondent Carassava from Athens.