Greece

Thid video from Reuters includes comments from my favorite Greek economist, Yanis Yaroufakis

Greek coalition set to form 'within hours'

GREEK political leaders last night were close to forming a government that was expected to immediately seek a third bailout, according to likely coalition partners

the Age,

26 April, 2012

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''Agreement on a policy roadmap is the definitive point to form a government,'' Democratic Left leader Fotis Kouvelis said after meeting Pasok leader Evangelos Venizelos in Athens last night.

''The process is speeding up. It is possible that in the next few hours, or within the day, a government can be decided.''

As Antonis Samaras, leader of Greece's New Democracy party, scrambled to forge a coalition with the centre-left Pasok, officials admitted their first task would be to renegotiate the €130 billion ($163 billion) bailout agreed to last month.

Senior economic adviser Dimitrios Tsomocos said Mr Samaras intended to ''honour Greece's contractual obligations but will actively and aggressively renegotiate the memorandum''.

Another senior aide warned of a ''social explosion'' in Greece if the bailout's terms were not relaxed.

Athens has to reduce its budget deficit to below 3 per cent of gross domestic product by 2014 and find another €11 billion in public spending cuts from 2014 to 2016.

German Chancellor Angela Merkel has insisted Greece will have to meet commitments made to international lenders. But her Foreign Minister, Guido Westerwelle, said he could ''well imagine talking again about timelines''.

New Democracy won 129 of the 300 seats in Sunday's election, including a bonus 50 seats for coming first. Mr Samaras has three days to form a ruling alliance with the mainstream socialists of Pasok (33 seats) and the Democratic Left. 

Democratic Left, which has 17 seats, has demanded commitment to staying in the euro as well as ''gradual disengagement'' from the austerity measures.

Greek President Carolos Papoulias has warned Mr Samaras that ''the country cannot remain ungoverned for even an hour''.

A rally in financial markets at the result of Greece's election was short-lived, amid fears that Europe's worsening debt crisis might engulf Spain and Italy.

''The Greek election result averts the most immediately alarming scenarios for the eurozone but makes no fundamental change in the medium-term outlook,'' said Stephen Lewis, of Monument Securities.

Graham Turner, of GFC Economics, said about Greece: ''There will be another election within six months, when Syriza [the main anti-bailout party] is widely expected to take control.

''However, whoever governs Greece will be faced with a similar compelling logic.

''A second debt restructuring will be required to keep Greece within the single currency,'' he said.