Greek radical leftist rejects call for unity government

By Harry Papachristou and Renee Maltezou

ATHENS | Tue Jun 12, 2012 2:40pm EDT

(Reuters) - The leader of Greece's leftist SYRIZA party on Tuesday ruled out forming a government with pro-bailout parties after June 17 elections that could decide the nation's future in the euro zone.

Instead, SYRIZA chief Alexis Tsipras said that, if elected, he would lead a government of the left against the painful austerity measures demanded by the European Union and the International Monetary Fund.

Tsipras, who wants to scrap a 130 billion euro ($162 billion) bailout deal signed in March, rejected what he called an "all-party ragtag" following calls for a unity government in case next week's vote proves as inconclusive as the last one held in May.

"After two consecutive elections, people demand a clear direction," he said.

The leader of the Socialist PASOK party, Evangelos Venizelos, said at the weekend that Greece risked social unrest unless all parties were involved in making the hard decisions which lay ahead.

The last opinion polls published before a pre-election blackout showed SYRIZA running neck-and-neck with the conservative New Democracy party, which wants only minor adjustments to the bailout.

No party appears strong enough to form a government alone.

Tsipras, a 37 year-old civil engineer who shot from obscurity to international prominence after the May election, repeated his pledge to keep Greece in the euro zone, despite his promise to renege on the bailout accord.

"We will take the responsibility of governing the country and guaranteeing a stable, safe and just course for the people within the euro zone," he said.

Greece's European partners have insisted that Athens must stick to the bailout agreement or face seeing funds cut off, but Tsipras expects they would back down before accepting the havoc and Greek exit would cause to the world economy.

The dire consequences for the Greek economy of being forced out of the single currency have prompted speculation that Tsipras could back down if elected, but he gave no hint of softening during a press conference just days before the crucial election.

SYRIZA, a party forged from 12 more or less radical leftist groups, has surfed a tide of popular anger after five years of recession and some of the harshest austerity measures ever imposed on a modern European economy.

If elected, Tsipras promised he would halve his own salary as prime minister, scarp benefits for politicians and bring Greece's battered banking sector under state control.

"If we are elected, we will move swiftly to recapitalize banks with common voting shares, what we call socialization of the banking system, put them under public and social control so that Greek depositors feel safe," he said.

Underlining the drastic state of Greece's public finances, the Finance Ministry reported that the central government budget deficit widened by 4.5 percent in the first five years to 10.9 billion euros.

(Editing by Alessandra Rizzo)