Greece is still without a government. If a deal is not reached soon a new round of elections will take place in a matter of weeks.
The left wing Syriza Party, who rode a strong anti-austerity campaign into second place in the polls last week, have refused to enter any coalition that would continue upholding the terms of EU/IMF bailout packages. “Syriza refuses to be a left-wing alibi for a government that will continue the policies the people rejected on May 6,” Syriza leader Alexis Tsipras told Greek state television after another round of conversations with the pro-austerity New Democracy and Pasok Parties.
Tsipras has called the bailout package “barbaric” and said while he still wants Greece to remain in the euro zone he would not abide by the fiscal conditions set by the European community. Both New Democracy and Pasok leaders have insisted that slashing spending is necessary and that Syriza is not being realistic in its commitment to reversing cuts.
European stock markets have reacted negatively to the political stalemate which has heightened some analysts’ fears that Greece will leave the euro zone. Traders retreated to stocks considered safer including government bonds and US dollars in trading on Monday. Speaking to the Guardian, European market analyst Chris Beauchamp said that “uncertainty is driving markets at present, with the main fear being that Greece will leave the euro zone.” His comments echoed other observers who indicated that the prospect of Greece leaving the euro is now more likely than at any other time in the crisis.
The European Commission released a statement on Monday saying that it wished Greece would remain in the euro zone but that it must continue to implement the fiscal policies set by European policy makers.
The Greek electorate has turned staunchly against austerity and Syriza now holds a first place lead in the polls. Despite this, Greek voters have expressed fear that the parties have been unable to forge a coalition agreement, with as much as 72 percent saying that the parties should come to an agreement “all costs.”
