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Tuesday, August 25, 2015

Greece: Newly formed party receives mandate to form gov't

August 24, 2015

ATHENS, Greece (AP) — A new anti-austerity party formed by rebel lawmakers who quit the governing left-wing Syriza was given its chance Monday to seek government coalition partners and prevent Greece from holding its third national vote this year.

Former energy minister Panagiotis Lafazanis, who heads the newly formed Popular Unity, received the maximum three-day mandate from the country's president after the head of the main opposition conservative New Democracy failed to form a government.

Neither of the two parties was expected to find willing coalition partners, and early elections are practically guaranteed in September following the resignation of Prime Minister Alexis' Tsipras last week, seven months into his four-year term. The most likely date is seen as Sept. 20.

The renewed political uncertainty has hammered the Athens Stock Exchange, which was down 11.3 percent in afternoon trading Monday, dragged down by Europe-wide jitters after China's market tumbled. That followed two straight days of losses last week on election concerns.

Tsipras resigned on Thursday following a rebellion in his party over Greece's new bailout, which saw dozens of Syriza lawmakers dissent and vote against him when the deal came to a vote in Parliament.

Syriza hardliners blasted the party's young leader for reneging on the promises which brought him to power in January elections to repeal austerity measures imposed in return for Greece's two previous international bailouts.

Tsipras has insisted he had no choice but to accept the steep tax hikes and deep spending cuts demanded by European creditors in return for the country's new three-year, 86 billion euros ($99 billion) bailout, to prevent Greece from a potentially catastrophic default and being forced out of Europe's joint currency.

A war of words erupted between New Democracy and Syriza over the weekend when Tsipras refused to meet with New Democracy leader Evangelos Meimarakis as part of the exploratory mandate. "Unfortunately, the country is being led to a catastrophic, in my opinion, course that could have been avoided, with the responsibility of Mr. Tsipras," Meimarakis said during his meeting with Pavlopoulos. "I believe he can still understand that he must meet with us so there can be, even now, an effort at agreement so we can avoid such a course."

Under electoral regulations, each of the three largest parties in Parliament has a maximum three days to seek coalition partners. If no coalition can be formed, the president convenes a meeting of party leaders in a last-ditch attempt to find consensus before a caretaker government is appointed and an election date is set.

This looms as the third time this year that Greeks head to the ballot box, after the January election and a July referendum Tsipras called within a week, urging voters to reject creditor reform demands — which they overwhelmingly did.

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