Greeks appear to be headed to the polls again in a matter of weeks, after leaders of two top performing parties in last weekend's election failed to form governing coalitions, and the third, the former-majority PASOK party, is highly unlikely to do so in its allotted 72-hour time frame.

Voters flocked to fringe parties on both sides in the election as a reaction to the deeply unpopular €130 billion bailout deal the former government agreed to in February. The Coalition of the Radical Left, better known by its Greek acronym, SYRIZA, placed second to the center-right New Democracy party with 17 percent of the vote, while the far-right anti-immigrant Golden Dawn party won 7 percent. The mainstream European socialist PASOK dropped from 44 percent in the last election to 13 percent this year.

Both edges of the political spectrum benefited from this exodus from the middle, which was driven by a reaction to the terms of the bailout deal, which required further, deep cuts in Greek government spending and gave Europe more control over the Greek economy. The Greek government needed this money as a lifeline and had no leverage to negotiate more favorable terms, but many Greeks viewed the deal as an insult and reacted accordingly at the polls.

In an interview with the Associated Press, the leader of SYRIZA, Alexis Tsipras warned that he would not take part in any governing coalition supporting the terms of the bailout package.

"The Greek people gave a clear mandate to cancel these harsh austerity measures that for the past two-and-a-half years have led us to catastrophe. If this basic condition that we are setting in this negotiation isn't accepted, it is clear that we at least can't participate in a government."

Tsipras does, however, want to stay in the Eurozone, a sentiment also popular among most Greeks. European ministers warn that Greece cannot have it both ways; that rejecting or overly renegotiating the terms of the bailout deal will affect whether Greece continues being part of the common currency.

German Foreign Minster Guido Westerwelle sounded a warning at a conference in Brussels, covered by the New York Times:

"We want Greece to stay in the euro zone, but whether Greece stays in the euro zone is in Greece’s hands."

Europe backed up some of these words with real actions. According to the Wall Street Journal, European ministers withheld €1 billion of a previously scheduled payment.

 

Greece's euro-zone partners agreed to release only EUR4.2 billion ($5.5 billion) in previously agreed financing, to be paid out Thursday, holding back EUR1 billion at least until June. That would be paid only if Greece keeps to pledges it made to secure a bailout.

Athens has around EUR4 billion in cash reserves, according to government officials. If the full loan amount was paid it could carry the country to the end of July, provided Greece only makes essential payments like salaries and pensions, the official said.

"Now with minus EUR1 billion, we estimate that cash would last until late June or the beginning of July," a former Socialist government official said. "It's going to be very tight."

 

The standoff between Greek voters and European finance ministers over the bailout deal does not appear to be ending anytime soon. New elections, which SYRIZA looks likely to win, may only further harden their resolve, at least until bills come due.

Reach Executive Producer Matt Pressberg here.