Last-ditch attempts to form a coalition government in Greece have failed once again, bringing the country one step closer to new elections, as well as potential removal from the eurozone.
Talks between President Karolos Papoulias and party leaders to cobble together a deal fell apart late Sunday, just one week after national elections put the country in political stalemate. No single party won enough seats in the election to form a government.
State television said talks between the heads of the country's political parties -- the conservative New Democracy, radical left-wing Syriza, socialist PASOK and the Democratic Left party -- will continue Monday evening.
However, Syriza leader Alexis Tsipras said he won't attend the talks, maintaining that his party refuses to join a government that continues to abide by the country's economic bailout agreement.
Syriza has criticized the government for accepting the terms of the bailout, which they say are too harsh.
"Syriza refuses to be a left-wing alibi for a government that will continue the policies the people rejected on May 6," NET state television quoted Tsipras as saying.
Leaders of the other parties say they will attend Monday's talks and that a coalition must be formed in order to maintain Greece's membership in the eurozone. However, party leaders have insisted it must have the support of Syriza before continuing.
The terms of Greece's bailout package has forced the country to impose severe cuts, including slashing public sector pensions and salaries, as well as repeatedly increasing taxes.
As a result, Greece has entered a fifth year of deep recession, with unemployment hovering above 21 per cent.
Tsipras said that mounting pressures to form a coalition government is akin to asking his party to "become an accessory to crime."
"In the name of democracy, of our patriotic duty, we cannot accept this shared guilt. We call on all Greeks to condemn once and for all the forces of the past and to realize that only one hope remains: unity against blackmail in order to prevent the continuing barbarity.
"Fellow Greeks, we can assure you of one thing: we will not betray you."
If a solution cannot be found, Greece will hold new elections in June.
The political uncertainty has put the country's economic bailouts worth $310 billion at risk.
Without the bailout funds there could be a run on Greek banks that already have little liquidity, followed by the country defaulting on its debts and then an exit from the euro currency.
Meanwhile, Canada is relatively safe from major economic fallout if European banks fail, Finance Minister Jim Flaherty said Sunday.
"There's no question that if there's a shock, a failure in the banking system in Europe that it's going to affect us," he told CTV's Question Period Sunday.
"We think the impact will not be overwhelming and it's manageable," he said.
Flaherty warned that European countries like Greece face a "very serious problem" with sovereign debt.
He suggested eurozone countries follow his government's model of managing the economy, while at the same time reducing debt without extreme measures.
"Yes, there will be some hard times in Europe, but they will come out of it and they will come out of it in sound fiscal condition," he said.
Tsipras is essentially calling Europe's bluff and argues austerity measures are putting Greek society under tremendous pressure, New York Times Rome Bureau Chief Rachel Donadio told Â鶹´«Ã½ Channel Sunday.
"The socialists and New Democracy back that loan agreement at the risk of their own political survival, but they argue they did this in order to save the country," she said in telephone interview from Rome.
What's really happening, she said, is the ultimate clash between democracy and market forces.
"Greece's European lenders, the International Monetary Fund and European leaders, especially the German finance minister, are constantly saying that unless Greece puts together a credible government that can stick to the country's commitments, Europe will no longer fund Greece," Donadio said.
