Greece seeks to avoid repeat elections

Greek socialists ploughed ahead Friday with talks to form a coalition government, citing some progress after indecisive weekend polls.

Liberal daily Kathimerini spoke of a "slim opportunity" and pro-socialist Ethnos said a "step forward" had been made after socialist leader Evangelos Venizelos on Thursday won the conditional support of the small Democratic Left (Dimar) party in negotiations to form a cabinet.

The stalemate in Greece has raised fears of political chaos that could kill off reforms and eventually force the debt-laden nation to leave the eurozone.

German Finance Minister Wolfgang Schaeuble said in an interview published Friday that the eurozone would cope if Greece left the currency union.

"We want Greece to remain in the eurozone," he told the regional Theinische Post. "But it also has to want this and to fulfill its obligations. We can't force anyone. Europe won't sink that easily."

Venizelos was scheduled to meet at 0700 GMT with Antonis Samaras, leader of the New Democracy conservative party which topped lists in Sunday's inconclusive election that witnessed an anti-austerity backlash by voters.

"We have made a first step," Venizelos said Thursday, adding that there had been a "good omen" in his meeting with Dimar leader Fotis Kouvelis.

Venizelos, whose party came a distant third at the polls winning 41 seats in the 300-seat parliament, had earlier said he wanted to create a unity government that would keep Greece in the eurozone -- an aim echoed by Kouvelis.

His efforts follow consecutive post-election failures this week by the first-placed conservative New Democracy party and the runner-up, the radical leftwing Syriza, which had come out strongly against the tough spending cuts.

A fresh setback would result in President Carolos Papoulias calling on parties to form an emergency coalition. If that cannot be done by May 17, new general elections will be called.

Voters on Sunday punished Pasok and New Democracy for having pushed through severe austerity measures in return for multi-billion-euro international loans to stave off bankruptcy and keep Greece in the eurozone.

However, many still believe repeat elections are almost certain.

The European Union is sending a strong message that Greece must honour the bailout conditions of budget cuts and deep reforms after Venizelos and Samaras advocated renegotiating the deal to boost growth.

Creditors have warned that a rescue loan instalment to be paid on Thursday could be the last if Athens reneges on its reform commitments, raising questions over the future of Greece in the 17-member eurozone.