Greek coalition talks make little progress

Greece's politicians lurched towards a ninth day of talks to try and form a government that could handle the country's acute financial crisis,stave off default and ensure Greece stays in the euro.

More than a week after inconclusive elections left no party with enough votes for a majority in parliament, party leaders have been unable to agree on power-sharing amongst themselves. Greeks furious over the handling of the financial crisis and the harsh austerity measures imposed in return for two massive international bailoutshave deserted the formerly dominant conservative and socialist parties in favor of smaller groups on the right and left who campaigned on an anti-austerity ticket.

Euro ministers plead with Greece

Leading European Union finance officials promised to stand by Greece as a member of the eurozone, provided it sticks to its bailout terms and stays the course of its painful austerity program to prevent even worse economic hardship.

Many euro finance ministers attending a meeting in Brussels warned, however, that Athens must stick to the terms of the rescue package if it wants to remain in the 17-nation euro currency.

In return, no one was seeking to squeeze Greece out of the shared currency, said Luxembourg Prime Minister Jean-Claude Juncker, the chairman of the Eurogroup.

The Associated Press

President Karolos Papoulias, who has been trying to break the deadlock, suggested during a meeting with the heads of three parties Monday night that a government of technocrats or respected personalities be created, with broad parliamentary support.

He will meet with the heads of six of the seven parties that won parliamentary seats in the May 6 election, socialist PASOK party leader Evangelos Venizelos said after talks Monday with the president and the heads of conservative New Democracy and the small Democratic Left parties.

Venizelos did not list the extremist right-wing Golden Dawn party among those invited. Golden Dawn's surge in popularity in the election has caused consternation amongst many Greeks, and the other parties have been reluctant to have any dealings with its leaders.

'Historic responsibilities'

If no solution can be found, the country will have to hold new elections in June.

"The effort to form a government continues. All three of us political leaders agreed that it is absolutely necessary to have the broader support of political parties to attain such a viable government," New Democracy leader Antonis Samaras said after Monday's meeting with the president.

"The people have given us a very clear mandate: We must try, as far as we can, all of us together, to shape this new government. Everyone must now assume their historic responsibilities," he said.

The turmoil has roiled international markets and led Greece's stock exchange to nose-dive over the past week.

Negotiations so far have proved fruitless. The three parties have insisted on the participation of the radical left Syriza party, which came second in the elections after campaigning on a platform for Greece to pull out of its international bailout commitments.

No outright winner in May 6 vote

The conservative New Democracy party won May 6 general elections, but the poll failed to produce an outright winner. The second-placed left-wing party, Syriza, had refused to join a coalition, demanding that the terms of an international bailout be scrapped or radically renegotiated.

Syriza Leader Alexis Tsipraswas not expected toattend Monday's meeting, party officials said.

"They are looking for an accomplice to continue their catastrophic workwe will not help them," Panos Skourletis, a spokesman for the party, told Mega television.

The political turmoil has taken a toll on markets across Europe, with shares on the Athens Stock Exchange 3.5 per cent lower at 590.38 in midday trading.

Flaherty uses Greek crisis as warning

On Monday, Canadian Finance Minister Jim Flaherty seized on theturmoil in Greece to pressure opposition parties at home to help with the swift passage of the Conservative government's budget bill.

'We see the results of delay and inaction in Europe today, so I encourage the oppositon to be wary of counterproductive political theatre at this serious and fragile time' Canada's Finance Minister Jim Flaherty

"We see the results of delay and inaction in Europe today, so I encourage the oppositon to be wary of counterproductive political theatre at this serious and fragile time," he warned.

"This is no time to stray fromour course."

Flaherty told reporters in Ottawa that a "very uncertain situation in Greece" and other eurozone countries raises deep concerns about ripple effects for Canada and the global economy.

Speaking to CBC's Evan Solomon on Power& Politics Monday, Flaherty said a rejection by Greek voters of austerity measures would signal a restructuring of the eurozonea potentially messy scenario.

"It's certain to be disorderly, and that's not good for markets, it's not good for the banking system around the world," he said.

Whilethe ministersaid Canadian banks don't have much exposure to European risk, he noted the global economy is fragile and reiteratedthat it'sCanada's position not to contribute any further fundsto prop up the eurozone.

"We are not supportive of putting additional resources into the IMF so that money can be used to bail out other countries in Europe that can deal with their own challenge," he said.