Greek leftists reject technocrat government...[ 2854 ]

Greek leftists reject proposal for technocrat government

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By George Georgiopoulos and Karolina Tagaris
ATHENS | Mon May 14, 2012 6:04pm EDT

(Reuters) - Greece's president will ask politicians on Tuesday to stand aside and let a government of technocrats steer the nation away from bankruptcy, but leftists have already rejected the proposal and look set to force a new election they reckon they can win.

Party leaders, deadlocked since a parliamentary vote nine days ago, will convene at the presidential palace at 2 p.m. (1100 GMT) but said they had little hope President Karolos Papoulias's offer would resolve a political crisis that has fuelled speculation Greece's days in the euro zone are numbered.

The multi-party political landscape has been in disarray since an inconclusive election on May 6 left parliament divided between supporters and opponents of a 130 billion-euro ($168-billion) EU/IMF bailout, with neither side able to form a coalition that would have a stable majority in the legislature.

If supporters and opponents of the bailout cannot agree a government, the head of state must call a new election in June.

The bailout's main opponents - the surging radical leftist SYRIZA party which now leads opinion polls - said they saw the president's plan for a government of non-partisan experts as nothing but a scheme to impose the harsh wage and pension cuts demanded by the foreign lenders but already rejected by voters.

"We will attend the meeting. But we are sticking to our position. We don't want to consent to any kind of bailout policies, even if they are implemented by non-political personalities," SYRIZA spokesman Panos Skourletis said.

The prospect that a future Greek government would renege on bailout pledges sent European shares sliding and Spanish and Italian bond yields higher on Monday. Investors fear a Greek exit from the euro would pile risks on other euro zone economies with debt problems.

Papoulias, 82, named a technocrat prime minister six months ago when Greece's two biggest parties - the conservatives and socialists - joined forces to enact the bailout. But both of those parties were punished in last week's election, and those which oppose the bailout now are stronger, angrier and in no mood to compromise.

HOPES DIM

Socialist leader Evangelos Venizelos, whose party commanded a majority in the outgoing parliament but was reduced to third place behind SYRIZA in last week's electoral earthquake, backed the technocrat proposal but expressed doubt it would succeed.

"It's not normal to have a government by technocrats or personalities but when you are in such a crisis, in such a dead end, we have to accept this as well."

He added: "Things are very difficult. I'm not optimistic."

The leader of the moderate Democratic Left party, which has enough seats to offer the pro-bailout parties a majority but has refused to join a coalition without SYRIZA, said he opposed the president's suggestion.

"I told the president that a government by technocrats or personalities would suggest the failure of politics, and raised my objection," Fotis Kouvelis said.

Euro zone finance ministers and officials met in Brussels on Monday, where they were asked repeatedly about whether Greece could keep using the euro or might receive softer bailout terms.

Euro group president Jean-Claude Juncker said a new Greek government could potentially raise the question of extending deadlines to meet some of its austerity targets, as long as it was still firmly committed to them.

"The Greek government would have to make clear it is fully committed to the program, and then if there were exceptional circumstances we wouldn't exclude discussing this issue," he said. "Anyway, there wouldn't be any substantive changes involved."

Juncker spoke strongly against the prospect of a Greek exit from the euro: "I don't envisage, not for one second, Greece leaving the euro area. This is nonsense. This is propaganda."

But even as they strongly resist suggestions Greece might have to give up the currency, EU officials have broken a taboo by openly discussing it, a sea-change in the mood in Brussels.

"We wish Greece will remain in the euro and we hope Greece will remain in the euro ... but it must respect its commitments," European Commission spokeswoman Pia Ahrenkilde Hansen told a regular news briefing in Brussels, responding to a question she would have probably avoided just weeks ago.

"Greece has its future in its own hands and it is really up to Greece to see what the response should be."

($1 = 0.7726 euros)

(Additional reporting by Harry Papachristou and Renee Maltezou; Writing by Peter Graff; Editing by Alastair Macdonald)

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