Greek parties bicker over coalition to save the nation (Reuters)

ATHENS (Reuters) ? Prime Minister George Papandreou launched his campaign on Saturday for a coalition to save Greece from bankruptcy, but rival parties showed little willingness to cooperate in tackling the nation's economic, political and social crisis.

Papandreou said negotiations would start soon to form a broad-based government, tasked with ensuring parliament backs a euro zone bailout vital to keeping Greece afloat and preventing its crisis from bringing down much bigger economies.

But a government source said Papandreou's deputy, Finance Minister Evangelos Venizelos, was already negotiating behind the scenes to win support from smaller parties for a government that Venizelos himself wants to lead.

"Venizelos is having contacts with party leaders to secure their agreement," said a government official who requested anonymity.

Greece's two top political forces -- the ruling socialist PASOK party and conservative opposition New Democracy -- displayed little appetite for working together to tackle a crisis that has driven Greece deep into recession, sent unemployment soaring and living standards tumbling.

REJECTION

New Democracy chief Antonis Samaras flatly rejected Papandreou's proposal of a coalition which would rule for several months and shepherd the 130 billion euro bailout, Greece's last financial lifeline, through parliament.

But in snubbing Papandreou, who survived a parliamentary confidence vote in the early hours of Saturday, the conservative opposition acknowledged the leading role being played by his finance minister in the maneuvering for power.

"Whenever we try to find a way out, the Papandreou-Venizelos government invents new obstacles to block it," New Democracy chief Antonis Samaras said. "We made our offer and he (Papandreou) shut the door. The offer is still on the table. I hope he realizes his mistake."

Samaras repeated his demand for Papandreou to make way for a short-lived national unity government before snap elections. "We did not seek a role in this government, only that Mr Papandreou, who has become dangerous for the country, resigns."

Two opinion polls showed Greeks appeared to favor Papandreou's option. One commissioned by Proto Thema newspaper showed 52 percent of respondents supported the coalition idea while 36 percent wanted snap elections as proposed by Samaras.

Another poll commissioned by Ethnos newspaper put support for the rival proposals at 45 and 41.7 percent respectively.

Papandreou, whose father and grandfather were famous Greek prime ministers, defeated Venizelos for the PASOK leadership in 2004. But as Greece's economic crisis created political turmoil, he turned for support to Venizelos, a burly former law professor with a reputation as a political bruiser.

Sources close to negotiations insist that Papandreou -- by contrast an athletic, U.S.-educated member of an elite family -- is going through the motions of trying to form a coalition, and will eventually make way for Venizelos.

Far from being competing political forces, the sources say, the two are aware of what each other is doing under a deal allowing Papandreou to depart with honor after two years in which the government has imposed pay and pension cuts plus tax rises at the behest of Greece's international lenders.

The cabinet is due to meet informally on Sunday afternoon.

UNLIKELY BEDFELLOWS

Venizelos appeared to be reaching out to some unlikely bedfellows in his hunt for support. George Karatzaferis, who heads the far right LAOS party, said he had spoken to Venizelos in parliament during the confidence debate.

However, he played down the significance of their encounter, saying he would not join any coalition without New Democracy being there too and urged Samaras to change his mind.

"We need to realize that we haven't got a prime minister. It's all a formality. Papandreou resigned yesterday in parliament and the applause in the room was divided equally, for his speech and for his departure," Karatzaferis said.

Papandreou officially opened his search for a coalition after meeting President Karolos Papoulias, saying Greece had to establish a political consensus to prove it wanted to keep the euro, while European leaders try to persuade the outside world that the currency bloc can overcome its huge problems.

"In order to create this wider cooperation, we will start the necessary procedures and contacts soon," he told reporters. "A lack of consensus would worry our European partners over our country's will to stay in the euro zone."

Without saying when he might quit, Papandreou said during the confidence debate he was ready to discuss who should lead the new government. "The last thing I care about is my post. I don't care even if I am not re-elected," he said.

Under heavy domestic and international pressure, the prime minister retreated from a proposal for a referendum on the euro zone rescue. Greek voters could well have rejected the deal, potentially torpedoing euro zone leaders' attempts to stop the debt crisis devastating economies such as Italy and Spain.

THINGS MAY TURN UGLY

Weary Greeks expressed disgust at the political wrangling.

"I'm sick of politicians in Greece, and feel that things will now turn ugly. If only they could cooperate, everything would be much better," said Tassos Pagonis, a 48-year-old Athens taxi driver. "But will Greece be saved? I'm afraid not. Europeans don't trust us anymore, they will throw us out."

Pensioner Yiannis Vlahos, 83, compared the fates of Greece and Germany, which occupied the country in World War Two.

"When the Germans left we had some hope. They were ruined by World War Two but they worked hard and became the strongest economy. We Greeks haven't learned our lesson, we only steal," he said. "We ourselves hate our beautiful country."

The leaders of France and Germany told Papandreou this week that Greece would not get a cent more of aid if it failed to approve the bailout, meaning that the state would run out of money in December.

(Additional reporting by Reuters Athens bureau; Writing by David Stamp; Editing by Mark Heinrich)

Source: http://us.rd.yahoo.com/dailynews/rss/eurobiz/*http%3A//news.yahoo.com/s/nm/20111105/wl_nm/us_greece_referendum

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