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Greece parties look to seal coalition Greece parties look to seal coalition
(about 6 hours later)
Talks on the formation of a coalition government in Greece have gone into a second day, amid intense pressure from world powers and financial markets. Senior officials of three Greek parties are holding talks on forming a government amid intense pressure from world powers and financial markets.
New Democracy, the centre-right party which won Sunday's election, is seeking an alliance with the socialist Pasok party and the smaller Democratic Left. The talks involve New Democracy, the conservative winners of Sunday's election, the socialist party Pasok and a third party, Democratic Left.
All three parties have said the new government should take office quickly. Between them, the three would have a majority of 29 seats in parliament.
They also favour keeping Greece in the euro, but want to renegotiate the terms of its bailouts by the EU and IMF. They all favour keeping Greece in the euro while wanting to renegotiate terms of its EU/IMF bailouts.
However, European leaders have indicated that there is limited room for manoeuvre and are expecting details on how the new government intends to make another 11.7bn euros (£9.4bn; $14.7bn) of cuts by 2014.However, European leaders have indicated that there is limited room for manoeuvre and are expecting details on how the new government intends to make another 11.7bn euros (£9.4bn; $14.7bn) of cuts by 2014.
'Optimistic''Optimistic'
New Democracy won 129 seats in Greece's 300-seat parliament on Sunday, followed by the radical anti-bailout party, Syriza, with 71, Pasok with 33 and the Democratic Left with 17.New Democracy won 129 seats in Greece's 300-seat parliament on Sunday, followed by the radical anti-bailout party, Syriza, with 71, Pasok with 33 and the Democratic Left with 17.
On Tuesday, Pasok leader Evangelos Venizelos held talks on joining a coalition government with his Democratic Left counterpart, Fotis Kouvelis. Earlier on Tuesday, Pasok leader Evangelos Venizelos held individual talks on joining a coalition government with his Democratic Left counterpart, Fotis Kouvelis.
Afterwards, Mr Venizelos told reporters he was "optimistic".Afterwards, Mr Venizelos told reporters he was "optimistic".
"Greece must and will have a government as soon as possible," he said. "I am confident after my meeting with Mr Kouvelis that our views are very close.""Greece must and will have a government as soon as possible," he said. "I am confident after my meeting with Mr Kouvelis that our views are very close."
But Mr Kouvelis was more cautious, saying the three parties would first have to agree on the coalition's policies and the division of cabinet posts.But Mr Kouvelis was more cautious, saying the three parties would first have to agree on the coalition's policies and the division of cabinet posts.
"There will be a government, but I don't know if it will be formed by tonight. I believe we will have reached an agreement by the end of the week. "There will be a government, but I don't know if it will be formed by tonight. I believe we will have reached an agreement by the end of the week," Mr Kouvelis added.
"There are still some outstanding issues regarding the programme of the government and the terms [of the bailout] from which Greece must disengage," Mr Kouvelis added. "There are still some outstanding issues regarding the programme of the government and the terms [of the bailout] from which Greece must disengage."
New Democracy leader Antonis Samaras's three-day mandate to form a government from President Karolos Papoulias expires on Wednesday. If it fails, Syriza would be given a chance, followed by Pasok.New Democracy leader Antonis Samaras's three-day mandate to form a government from President Karolos Papoulias expires on Wednesday. If it fails, Syriza would be given a chance, followed by Pasok.
But the leader of Syriza, Alexis Tsipras, has said he will not even attempt to do so. He has also refused to join a government led by New Democracy.But the leader of Syriza, Alexis Tsipras, has said he will not even attempt to do so. He has also refused to join a government led by New Democracy.
'Huge hardships''Huge hardships'
World powers have urged Greece to move swiftly to form a government.World powers have urged Greece to move swiftly to form a government.
On Monday, markets initially reacted positively to the election result, but that quickly waned.On Monday, markets initially reacted positively to the election result, but that quickly waned.
All the parties in the election wanted a renegotiation of the bailout terms, but differed on the extent.All the parties in the election wanted a renegotiation of the bailout terms, but differed on the extent.
Mr Samaras said late on Monday: "We will simultaneously have to make some necessary amendments to the bailout agreement, in order to relieve the people of crippling unemployment and huge hardships."Mr Samaras said late on Monday: "We will simultaneously have to make some necessary amendments to the bailout agreement, in order to relieve the people of crippling unemployment and huge hardships."
A senior New Democracy official told Reuters news agency it would support a quickening of the government's privatisation programme, but that it would prefer the scheduled 11.7bn euros of austerity cuts to be spread over four years, not two.A senior New Democracy official told Reuters news agency it would support a quickening of the government's privatisation programme, but that it would prefer the scheduled 11.7bn euros of austerity cuts to be spread over four years, not two.
Germany has indicated there will be few concessions on the terms.Germany has indicated there will be few concessions on the terms.
German Chancellor Angela Merkel warned: "Elections cannot call into question the commitments Greece made. We cannot compromise on the reform steps we agreed."German Chancellor Angela Merkel warned: "Elections cannot call into question the commitments Greece made. We cannot compromise on the reform steps we agreed."
However, the US said it might support a review of the terms.However, the US said it might support a review of the terms.
US Treasury Under-secretary for International Affairs Lael Brainard said: "We can expect to see on the part of the European partners and the IMF recognition that Greece's programme has gone off track for some period of time, in part because they had a protracted political process and have not had a government."US Treasury Under-secretary for International Affairs Lael Brainard said: "We can expect to see on the part of the European partners and the IMF recognition that Greece's programme has gone off track for some period of time, in part because they had a protracted political process and have not had a government."
Two international bailouts have been awarded to Greece, an initial package worth 110bn euros (£89bn; $138bn) in 2010, then a follow-up last year worth 130bn (£105bn; $164bn) euros, but they come with tough austerity measures attached.Two international bailouts have been awarded to Greece, an initial package worth 110bn euros (£89bn; $138bn) in 2010, then a follow-up last year worth 130bn (£105bn; $164bn) euros, but they come with tough austerity measures attached.
Greece has also had 107bn euros (£86bn; $135bn) of debt, held by private investors, written off.Greece has also had 107bn euros (£86bn; $135bn) of debt, held by private investors, written off.