ATHENS - Greece's socialists took their shot at forging a coalition government Thursday after two other parties failed, as the prospect of a new election grew and international partners warned the country it must stick to its austerity program or abandon the euro.
Evangelos Venizelos, whose once-dominant Socialist party finished a panting third in Sunday's elections, pledged to do his best to talk rival leaders into a pro-European government that will keep bailout-dependent Greece in the shared European currency.
Voters angered by crushing income cuts imposed to secure Greece's rescue loans abandoned mainstream politicians and backed parties promising to end the austerity. They gave 21 of parliament's 300 seats to the extreme-right Golden Dawn group that wants to mine Greece's borders and send illegal immigrants to labour camps.
The coalition-building talks exclude Golden Dawn, which rejects the neo-Nazi label but has been blamed for violent attacks against immigrants. But the other six parties elected have failed to agree on a ruling coalition over the past four days, and there is little reason to believe Venizelos will succeed.
"Things are not easy," Venizelos said after receiving the mandate from President Karolos Papoulias. "I am not declaring myself optimistic. But I am declaring myself responsible, and dedicated to this aim that I believe serves the national interest."
He is the third party leader to try, after Antonis Samaras, whose conservative New Democracy won the most votes, and runner-up Alexis Tsipras, who heads the Radical Left Coalition, or Syriza.
Venizelos has three days to strike a deal -- which would have to include the conservatives and either Tsipras' party or the smaller Democratic Left to gain a majority of 18-51 seats.
If his efforts fail, Papoulias will convene all the party leaders in a last-ditch attempt to cobble together a coalition. If that is also unsuccessful, new elections will be called for early June, prolonging the political uncertainty.
The major stumbling block has been Tsipras' insistence that the austerity program, without which the flow of rescue loans from the International Monetary Fund and other eurozone countries would dry up, be cancelled or frozen. Both Samaras and Venizelos argue such a move would be catastrophic for the country, and would force Greece out of the euro.
In a letter to European leaders Thursday, Tsipras said the election result left Greece's bailout commitments devoid of "political legitimacy," but stopped short of demanding that the program should be scrapped and debt repayments halted.
Tsipras said the cutbacks have failed to address the country's problems, are "destroying" the recession-bound economy and threatening to create a Greek "humanitarian crisis."
"We must re-examine the entire framework of the current strategy, as it not only threatens social cohesion and stability in Greece, but also creates instability for the European Union itself and the eurozone," he said, in the letter to EU President Herman Van Rompuy, European Commission President Jose Manuel Barroso and European Central Bank chief Mario Draghi.
But German Finance Minister Wolfgang Schaeuble said Thursday that there was no way around Greece sticking to agreed austerity measures if it wants to stay inside the eurozone -- although he acknowledged that it was a tough sell for any new government.
"It's an extraordinarily strenuous demand, to make the adjustments in Greece while staying in the common currency," he told reporters in Berlin.
Schaeuble categorically ruled out any renegotiation of the agreements, saying calls to do so didn't chime with the current economic reality. "Anyone who tells Greece something else isn't fulfilling their duty to the Greek people," he said.
Athens has promised to pass new austerity measures worth C14.5 billion ($18.9 billion) next month and to implement other reforms. These will be reviewed by its creditors, who will then determine whether to continue releasing rescue loans that are keeping Greece solvent.
The eurozone's bailout fund, the European Financial Stability Facility, released a C4.2 billion ($5.44 billion) batch of rescue loans on Thursday, while another C1 billion ($1.3 billion) is expected in June depending on Athens' needs.
The fund's chief executive, Klaus Regling, said that after the second payment there cannot be any further disbursement of money until the review and until Greece reaches an agreement with its creditors on what needs to be done over the next two years.
Markets, in the doldrums since Greece's election stalemate, partially rebounded Thursday, with shares on the Athens Stock Exchange closing 4.2 per cent up. But new Greek unemployment figures showed the jobless rate reaching 21.7 per cent in February, after more than 900 people lost their jobs every day on average in the prior 12 months.
