Greek political leaders meet on Wednesday to form a caretaker government that will lead the country into its second election in just over a month, with Greece’s euro membership at stake in a mounting crisis rocking world markets. Parties deeply divided over an unpopular EU-IMF rescue plan threw in the towel on Tuesday after nine days of failed attempts to put together a coalition, hitting heavyweight financial stocks as investors worried at the prospect that the euro zone weakling would remain in limbo for at least another month. Opinion polls show that voters enraged with five years of recession, record unemployment and steep wage cuts are likely to elect a parliament as fragmented as the one they chose on May 6. But the vote, probably in mid-June, may well tip the balance of power toward leftist parties opposed to the bailout conditions.
Policymakers from European Union states and at the European Central Bank have warned that they would stop sending debt-choked Athens the cash it needs to stay afloat if a new government tears up the bailout and backs out of commitments to cut the public debt which are blamed by many Greeks for misery. But many cash-strapped Greek voters shrug off the threat and see no contradiction between their deep-rooted wish to stay in the euro and their opposition to conditions imposed to obtain the bailouts that have staved off bankruptcy but have dragged the nation into its deepest economic crisis since World War Two.
“There is a bit of schizophrenia in our society right now. People want to stay in Europe – have the cake – but they also want to eat it – by attacking the creditors,” said Theodore Couloumbis at Athens-based think-tank ELIAMEP. “Much depends on whether the Greek people in this repeat election are going to vote with anger and passion or if they will cool off, reflect and see in effect what the real choices are. The choice is between bad and worse.” Party leaders will meet President Karolos Papoulias at 1 p.m. (6.00 a.m. EDT) to put together a caretaker government. It was not clear on Tuesday who would be part of that emergency cabinet, whose main task would be to organize the repeat election – the third in Greece in as many years.