12 May 2012

Last-ditch bid to save Greece from another election

5:15 pm on 12 May 2012

Greek president Carolos Papoulias is expected to call the country's political leaders to an emergency summit by Monday at the latest, in a final attempt to form a new government.

The meeting will be hoping to succeed where all the main party leaders have failed individually in several days of interparty talks.

Pasok's Evangelos Venizelos, the third leader to try to put together a government since last Sunday's election produced a hung parliament, has abandoned his efforts. The small Democratic Left party refused to join Pasok without the involvement of Syriza, and Syriza wants no part of a Pasok coalition.

Mr Venizelos also held fruitless talks with New Democracy, which got most votes in the election.

The BBC says the president is expected to try to pressure parties into a government of national salvation but is unlikely to succeed.

Greece is deeply divided over budget cuts demanded in return for a bailout by the European Union and the International Monetary Fund. In the election, most Greeks voted for parties that reject the severe terms of the bailout.

Fitch warns of downgrades

The country's debt crisis has raised the possibility it could default and be forced out of the eurozone.

European leaders have said that Greece will be ejected from the common currency if it turns its back on the package of tax rises and wage cuts.

Credit-rating agency Fitch has put the eurozone on notice that if Greece goes, the remaining countries could find their sovereign ratings at risk.

It says the countries most at risk of an immediate downgrade are France, Italy, Spain, Cyprus Ireland, Portugal, Slovenia and Belgium.

The agency's decisions, along with those of fellow agencies Moody's and Standard & Poor's, help set the cost of borrowing by governments.