Greek elections loom after leftist rejects coalition talks

Greece's political landscape has been in disarray for a week since an inconclusive election left parliament divided between supporters and opponents of the €130 billion EU/IMF bailout, with neither side able to form a government.

Government officials have warned that Greece could run out of cash as early as the end of June if it does not have a government in place to negotiate the next aid tranche with its lenders.

President Karolos Papoulias must call a new election if he cannot persuade leaders to compromise. After a day of fruitless negotiations on Sunday, he invited politicians from the biggest three parties to return to the presidential mansion at 1630 GMT on Monday, along with a small leftist group.

But an official from the second biggest party, the radical leftist SYRIZA, said its 37-year-old leader Alexis Tsipras would not attend.

The anti-bailout vote was divided among small parties but has now rallied behind Tsipras. Polls show he would now place first if the vote is repeated, a prize that comes with a bonus of 50 extra seats in the 300-seat parliament.

Tsipras has consistently refused to join a coalition government with the establishment conservative and socialist parties that ruled Greece for decades, but were punished by voters last week for their role in agreeing the EU rescue, which requires deep cuts in wages and pensions.

Tsipras says he wants to keep Greece in the euro but the bailout deal must be torn up, a position shared by an overwhelming majority of Greeks but regarded by many in Brussels as untenable. European leaders say tearing up the bailout would require them to cut off funding, allow Greece to go bankrupt and eject it from the European single currency.

European officials who once refused to discuss the possibility of Greece's exit from the euro now talk about it openly as a real, if painful, possibility.

"Divorce is never smooth," European Central Bank policymaker Luc Coene told the Financial Times. "I guess an amicable divorce - if that was ever needed - would be possible, but I would still regret it."