Anti-bailout party leads Greek coalition talks

[May 08, 2012]  ATHENS, Greece (AP) -- The head of a left-wing party opposed to the terms of Greece's bailout agreements was meeting with the country's president to receive the mandate to seek coalition partners and try to form a government after a general election produced a stalemate in parliament.

Alexis Tsipras, head of the Radical Left Coalition, or Syriza, was receiving the mandate Tuesday, a day after conservative party leader Antonis Samaras failed to reach agreement to form a government.

Tsipras' party came a surprise second in Sunday's elections. Voters punished both main parties -- Samaras' New Democracy and the socialist PASOK -- for their handling of the financial crisis.

No party won enough votes to form a government, leaving a coalition or new elections as the only options.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

ATHENS, Greece (AP) -- A left-wing party opposed to the terms of Greece's bailout agreements will on Tuesday try to form a government after a general election produced a stalemate in parliament.

The Radical Left Coalition, led by Alexis Tsipras, is to formally receive a mandate to form a government, and get three days to try and hammer out a power-sharing deal.

The party came a surprise second place in Sunday's election, after campaigning hard on a pledge to scrap bailout agreements that have kept the country afloat but also brought in harsh austerity measures. Greece is in its fifth year of recession and unemployment has spiked to over 20 percent.

Election winner, the conservative New Democracy, had first stab at forming a government on Monday but failed to find enough support from other parties.

Failure to reach a deal this week would trigger another general election in June, raising fears that Greece's painful deficit-cutting program -- along with Europe's troubled efforts to resolve its debt crisis -- could be thrown off track.

Shares were hammered by nearly 7 percent on the Athens Stock Exchange Monday, and were down a further 1.3 percent by midday trading Tuesday.

The government, however, managed to raise (EURO)1.3 billion ($1.69 billion) in a debt auction Tuesday with short-term borrowing costs continuing to creep up. It sold six-month treasury bills at an interest rate of 4.69 percent, compared with a 4.55 percent rate at an auction last month.

[Associated Press]

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