- Associated Press - Tuesday, May 8, 2012

ATHENS (AP) — Greece’s commitment to austerity is no longer valid because voters have rejected those deals, a left-wing party leader declared Tuesday as he tried to form a new coalition government.

Alexis Tsipras, head of the Radical Left Coalition party, which came a surprise second in Sunday’s tumultuous election, called upon Greece’s two main party leaders to renege on their support for the multibillion-euro international bailout that is keeping Greece afloat.

“There is no way we will sneak back in again what the Greek people threw out” in the election, he said, referring to resented austerity measures that have slashed incomes since early 2010 and led to record high unemployment.

Mr. Tsipras’ party won 16.8 percent of the vote and 52 seats in the 300-member parliament. He received the mandate to form a government after conservative New Democracy leader Antonis Samaras, who came in first with 108 seats and 18.9 percent of the vote, tried and failed on Monday.

As no party won enough votes to form a government alone, a coalition or new elections are Greek politicians’ only options to solve the country’s political gridlock.

“This is a historic moment for the left and the popular movement and a great responsibility for me,” Mr. Tsipras said, adding he would try to form a left-wing government that will “end the agreements of subservience” with Greece’s international bailout creditors.

The result of Sunday’s parliamentary election raised troubling new questions about Greece’s ability to stay solvent and in the euro currency bloc. A failure to put together a government this week would trigger another election in June, increasing fears that Greece’s painful deficit-cutting program — along with Europe’s faltering efforts to resolve its debt crisis — could be derailed.

Greece was expected to pass billions in new austerity measures in the next month in order to get its next batch of bailout money.

Those worries sent shares sinking nearly 7 percent on the Athens Stock Exchange on Monday, and shares were down a further 1.3 percent at midday Tuesday.

“The pro-bailout parties no longer have a majority in parliament to vote in destructive measures for the Greek people,” he added. “This is a very important victory for our society.”

Mr. Tsipras also demanded an examination of Greece’s debt and a moratorium on repayment of the part of it that is “onerous.”

If Mr. Tsipras fails to build a government over the next three days, the mandate will pass to Evangelos Venizelos, head of the third-placed Socialist PASOK party. If he is also unsuccessful, party leaders will hold a final effort to reach consensus. If nothing comes from that, elections will take place within a month.

Voters furious over years of painful budget cuts and higher taxes hammered both Mr. Samaras’ conservative New Democracy and PASOK in the ballot. The two parties have dominated politics for the past four decades and had backed Greece’s multibillion-dollar bailouts. Support scattered to several smaller parties, ranging from moderate leftists to an extreme-right group blamed for street attacks against immigrants.

Greece is now in its fifth year of recession, and unemployment has spiked to over 21 percent.

“With the state the economy is in, (Mr. Tsipras) does not have the luxury of losing any time,” Dimitris Mardas, an associate professor of economics at Thessaloniki University, told the Associated Press.

Mr. Mardas said he believed there was room to negotiate a coalition government.

“If a combination of parties gather more than 50 percent of the seats in parliament, they can govern — period. What anyone else says doesn’t matter. They are professionals, not children,” he said.

Amid the political drama, Greece raised 1.3 billion euros ($1.69 billion) in a debt auction Tuesday, but its short-term borrowing costs continued to creep up. It sold six-month treasury bills at an interest rate of 4.69 percent, compared with a 4.55 percent rate last month.

Associated Press writer Nicholas Paphitis contributed to this article.

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