Greece sank even deeper into crisis on Tuesday when a centrist conservative party said leftist candidate for prime minister Alexis Tsipras would drive the country out of the euro with his proposal to reject an international bailout.
New Democracy leader Antonis Samaras said in a televised statement that Tsipras was asking him to sign up to the destruction of Greece with his demand that an EU/IMF bailout be rejected as the condition for a coalition government.
"I won't do this," said Samaras, whose party was the biggest after Sunday's shock election but was abandoned by many voters angered by the economic suffering imposed in exchange for a bailout that is saving Greece from bankruptcy.
Samaras said he could support a minority government but not under these conditions, indicating that Left Coalition leader Tsipras had very little chance of forming an administration, and making repeat elections in a few weeks increasingly likely.
Tsipras, 37, who came second in the election, began his efforts to form a government on Tuesday, after receiving a mandate from the president, by renouncing the bailout and threatening to nationalise banks.
His statement is likely to further unsettle jittery investors worried that Greece will again destabilise the euro zone, as it first did in 2009 when the debt crisis began.
"The popular verdict clearly renders the bailout deal invalid," Greece's youngest political leader told reporters.
An official from his party said Tsipras had demanded that the two former ruling parties, New Democracy and the socialist PASOK, withdraw pledges given in exchange for the bailout as a condition for joining his government.
A coalition alliance with these two parties had looked like the only way Tsipras could form a government.
Tsipras got the chance to form the first leftist government in the country's modern history after New Democracy gave up the task as impossible after only a few hours on Monday.
The uncertainty after Sunday's poll has caused widespread fear about the future.
"I'm confused. I feel numb and confused. Only God can save us now," said Panagiota Makri, 80, crossing herself and launching into a long prayer on an Athens street.
THREE-DAY MANDATE
Tsipras received a three-day mandate from President Karolos Papoulias on Tuesday and aides said he would use the full time to meet a wide range of social groups as well as the other parties.
On paper, Tsipras simply does not have the numbers, with only 71 seats in the 300 seat parliament available to any potential leftwing alliance. The Communists have already refused to join.
The only option with a slight chance of success would see PASOK party join a coalition with Tsipras. If New Democracy stayed out of parliament for a confidence vote, rather than opposing it, Tsipras might win a majority.
His opening broadside seems to have rendered these calculations academic.
And even if such a government was formed, analysts say, it would be very fragile and last only a few months.
EU officials have rejected any compromise on the terms of the bailout and without it, Greece would run out of money by the end of June, officials estimate.
European Central Bank board member Joerg Asmussen became the latest European official to say the bailout could not be renegotiated and there were no alternatives if Greece wanted to stay in the euro zone.
A senior official in the outgoing government of technocrat Prime Minister Lucas Papademos said few of Tsipras's inexperienced aides seemed to understand that money would dry up to pay government salaries and pensions if the EU and IMF stopped the bailout.
Like many other senior politicians, the official blamed Samaras for underestimating the huge anger of the population over economic hardship, mismanagement and corruption and insisting on calling Sunday's vote instead of allowing Papademos to continue.
If Tsipras fails, the president will give a final mandate to PASOK leader Evangelos Venizelos, whose party was the biggest loser in the election.
If he, in turn, is unable to form a government, Greeks would go to the polls again in three to four weeks.
"The country is heading at high speed towards catastrophe," the Kathimerini daily said in an editorial.
"If a national salvation government is not formed in the coming days, new elections will become inevitable."
"HEADS IN SAND"
Chris Williamson, chief economist at London-based research firm Markit said the election had moved Greece deeper into crisis and uncertainty after the election.
"There was some hope that the lack of conclusion would galvanise parties in reorganising and shaking things up but this isn't happening which is disappointing," he said.
"There's an element of sticking heads in sand and more thought needs to go into where Greece is going and its ability to deal with deficit," Williamson said.
Out on the streets, Greeks already depressed by the economic crisis expressed apprehension about what would happen next.
"I'm afraid about what will happen now. I'm afraid because I'm not sure parties will cooperate, they are so divided," said Vaia, 30, who works for a clothing shop.
She voted for the extreme right Golden Dawn, whose success in the election has shocked many Greeks.
"I voted Golden Dawn but with a lot of doubts...I just wanted them to be in parliament, but not to be so big. I wanted them in to rock things, to force others to take care of problems."
A splinter group from the traditional Communist Party, the Left Coalition wants Greece to stay in the euro but rejects the 130 billion euro bailout, saying the country can survive without it.
Time is running out for Greece, which must come up next month with over 11 billion euros in extra spending cuts for 2013 and 2014 in exchange for more aid.
Officials told Reuters Greece could run out of cash by the end of June if there was no government to negotiate a new aid tranche with the EU and IMF.
New Democracy and PASOK won just over 32 percent of the vote and only 149 out of 300 parliament seats. PASOK won a landslide victory in the last election in 2009 with 44 percent.
CNBC
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