Conservatives: Greece Must Form Govt This Time

ATHENS, Greece (AP) - Greece must form a government after this weekend's vote, Conservative leader Antonis Samaras said Wednesday, insisting that his country should stay in the eurozone and try to amend its international bailout deal to stimulate its moribund economy.

The vote on Sunday comes after a May 6 ballot left no party with enough support to form a government, and talks about forming a governing coalition collapsed after 10 days. Greece's prolonged political deadlock has spooked the markets, raising fears that Greece could leave the 17-nation eurozone and default on its massive debts. That, in turn, could further exacerbate Europe's debt crisis, causing borrowing rates for debt-strapped Spain and Italy to soar and even threatening the viability of joint currency itself.

Samaras' New Democracy party has been running neck-and-neck in recent opinion polls with the radical left Syriza party, which came in a surprise second on May 6 and whose leader Alexis Tsipras has vowed to cancel Greece's bailout commitments. That could lead to Greece being forced out of the eurozone.

Opinion polls published ahead of a two-week pre-election ban showed that no party was likely to win enough votes Sunday to form a government on its own, meaning more coalition talks will be needed. If those fail, a third national ballot would be required - a prospect that would horrify European Union leaders and financial analysts alike.

Samaras insisted Wednesday that his party would do "everything for there to be a government."

The only conditions, he said, "is that we stay in the euro - we're not playing with Europe." His second condition was to amend the bailout deal so new jobs could be created.

Samaras insisted that pulling out of the bailout plan altogether "would be a recipe for catastrophe. It's an exit from the euro. We can't accept it under any circumstances."

The Fitch Ratings agency said Wednesday that a Greek exit from the eurozone would have a "severe" impact on banks in Portugal, Ireland, Spain and Italy.

"A strong response from policymakers would be required to prevent contagion" - the fear that other nations would also abandon the euro - the agency said in a report.

Greece has been relying on billions of euros (dollars) in rescue loans from the EU and International Monetary Fund since May 2010, when the country became priced out of the market by sky-high interest rates after years of overspending and falsifying financial data.

In return, Greece imposed drastic spending cuts across the board, reduced public sector salaries and pensions and repeatedly increased taxes. The austerity has left Greece struggling through a fifth year of recession and has sent unemployment spiraling to nearly 22 percent. Anger against the austerity measures has led to frequent and often violent strikes and protests.

Samaras has long said that many of the bailout conditions were wrong and has sought to change them. His party's program would not include any more public sector firings, he said, adding that there would be no more tax hikes or salary cuts either.

"I don't believe in and I don't want any more salary reduction or any more taxes," Samaras said. "Those salary reductions that were carried out destroyed the (consumer) market."

Greece's financial crisis has led to a protracted political crisis. Socialist Prime Minister George Papandreou was forced to resign late last year. An uneasy coalition government of the Socialists and New Democracy took over, led by former European Central Bank head Lucas Papademos.

After the May 6 vote produced a hung parliament, a caretaker government led by a judge, Panagiotis Pikrammenos, was appointed with the sole mandate of leading the country into new elections.