ATHENS, Greece - Critical last-ditch talks to form a coalition government in crisis-struck Greece foundered once more Sunday, leading the country one step closer to new elections, although the socialist party leader said he retained "existing but limited' optimism for a deal.
The political uncertainty has alarmed international creditors who have given Greece billions of euros in bailout loans over the last two years, and has thrown the country's continued presence in the European Union's joint currency into serious doubt.
President Karolos Papoulias convened the heads of the parties that came in the top three spots in this month's inconclusive elections, in an ultimate effort to broker an agreement after a week of talks led to deadlock.
The meeting ended without a solution. Papoulias also met Sunday evening individually with the leaders of smaller parties that made it into parliament. Those included the extremist right-wing Golden Dawn, whose head, Nikolaos Michaloliakos, caused a furor by giving a fascist salute during an Athens city council meeting last year. The party won 7 percent of the vote.
Voters furious at the handling of Greece's financial crisis and two years of harsh austerity measures taken in return for billions of euros in international bailout loans punished the formerly dominant socialist PASOK and conservative New Democracy parties in the elections. The two saw their support crumble to the lowest point in decades, while Radical Left Coalition, or Syriza, made big gains to come in second place after campaigning on an anti-bailout platform.
The PASOK and New Democracy leaders could form a coalition with the smaller Democratic Left party of Fotis Kouvelis - combined they would have 168 seats in the 300-member parliament. New Democracy won 18.9 percent last Sunday while PASOK garnered just 13.2 percent, compared to nearly 44 percent in the last elections in 2009. Kouvelis' 6.1 percent put him in a kingmaker position, with 19 seats.
But all three insist any power-sharing deal must include Syriza, led by Alexis Tsipras, 38, given its strong showing at the ballot box.
Tsipras, however, insists he cannot join or even lend his support to a government that will continue implementing the terms of Greece's international bailout. In return for 240 billion euro in rescue loans from the European Union and International Monetary Fund, Greece has imposed severe spending cuts, including slashing pensions and salaries in the public sector, and repeated rounds of tax hikes. The measures have left Greece mired in a fifth year of deep recession, with unemployment spiraling above 21 percent.
"The three parties that have agreed on a two-year government in order to apply [the bailout] have 168 seats in parliament," Tsipras said after the meeting. "Let them go ahead. Their demand that Syriza participate come what may in their own agreement is senseless and unprecedented."
Tsipras insists the terms of the bailout must be cancelled. PASOK head Evangelos Venizelos, who spent nine months handling the crisis as finance minister, and conservative leader Antonis Samaras, say that position is irresponsible and will force Greece out of the euro. Although Sunday's meeting convened by the president with the three top party leaders was inconclusive, Venizelos said that "I retain some limited but existing optimism that a government can be formed."
Samaras appeared more pessimistic. "I made every effort for the cooperation of all," he said. "Syriza didn't listen to the mandate of the Greek people and does not accept not only the formation of a viable government, but not even the tolerance of a government which would in fact undertake to renegotiate the terms of the [bailout] and the loan agreement."
Tsipras, however, stuck to his position, insisting that supporting a pro-bailout government would be a betrayal of his pre-election platform.