Talks between three Greek parties on forming a new coalition government are set to resume on Wednesday, amid intense international pressure.
New Democracy, the conservative winner of Sunday’s election, is expected to lead the new government.
Pasok leader Evangelos Venizelos said a government could be formed by midday on Wednesday.
New Democracy leader Antonis Samaras’s three-day mandate to form a government expires on Wednesday.
It is unclear whether Pasok, which came third in the vote, will join the government, or merely support it.
The third party is Democratic Left. Between them, the three parties would have a majority of 29 seats in parliament.
They all favor keeping Greece in the euro while wanting to renegotiate terms of its EU-IMF bailouts, although they differ on the extent.
However, European leaders have indicated that there is limited room for manoeuvre and are expecting details on how the new government intends to make another 11.7 billion Euros ($14.8 billion) of cuts by 2014.
New Democracy won 129 seats in Greece’s 300-seat parliament on Sunday, followed by the radical anti-bailout party, Syriza, with 71, Pasok with 33 and the Democratic Left with 17.
New Democracy won 129 seats in Greece's 300-seat parliament on Sunday, followed by the radical anti-bailout party, Syriza, with 71, Pasok with 33 and the Democratic Left with 17
World powers have urged Greece to move swiftly to form a government.
Speaking after talks between the three parties in parliament on Tuesday, Eavngelos Venizelos said a government “must be formed as soon as possible”.
He said his party would support the government “wholeheartedly”, but had not yet decided what form its participation would take.
If Antonis Samaras fails to form a government by the deadline on Wednesday, Syriza would be given a chance, followed by Pasok.
But Syriza leader Alexis Tsipras has said he will not even attempt to do so. He has also refused to join a government led by New Democracy.
Two international bailouts have been awarded to Greece, an initial package worth 110 billion Euros ($138 billion) in 2010, then a follow-up last year worth 130 billion Euros ($164 billion), but they come with tough austerity measures attached.
Greece has also had 107 billion Euros ($135 billion) of debt, held by private investors, written off.
Bailout deal – Greek pledges
• Cut 15,000 state sector jobs this year – aiming for 150,000 to be cut by 2015
• Cut minimum wage by 22%, to about 600 Euros a month
• Pension cut worth 300 million Euros this year
• Spending cuts of more than 3 billion Euros this year
• Liberalize labor laws to make hiring and firing easier
• Boost tax collection
• Carry out privatizations worth 15 billion Euros by 2015
• Open up more professions to competition (health, tourism and real estate)
• Greece aims to cut its debt burden to 116% of GDP by 2020
Parties in Greece are making their last pitch for votes ahead of a repeat election on Sunday seen as crucial to the debt-laden country’s future in the eurozone.
New Democracy, the pro-bailout conservative party which narrowly led at the ballot last month, is due to hold its last big campaign rally.
Syriza, the anti-bailout bloc which surged to second place in May, held its final rally in Athens on Thursday.
Unofficial opinion polls suggest a fall in support for anti-bailout parties.
Under Greek election law, official opinion polls are banned in the two weeks before the election.
Tough austerity measures were attached to the two international bailouts awarded to Greece, an initial package worth 110 billion Euros ($138 billion) in 2010, then a follow-up last year worth 130 billion Euros.
While five of the seven main political groups reject the last bailout, only one – the Communists – wants the country to abandon the euro.
Syriza, the anti-bailout bloc which surged to second place in May, held its final rally in Athens on Thursday
Germany, which has the eurozone’s most powerful economy, insists Greece, like other member-states which have received international bailouts, must abide by the austerity conditions.
German Bundesbank (central bank) chief Jens Weidmann repeated the warning on Friday, adding that the eurozone could not allow any country to “blackmail” it with the threat of financial contagion.
At Thursday’s rally, Syriza leader Alexis Tspiras renewed his pledge to tear up the bailout conditions, which involve drastic spending cuts, tax rises, and labor market and pension reforms.
“The memorandum of bankruptcy will belong to the past on Monday,” he told supporters in Omonia Square.
“Brussels expect us, we are coming on Monday to negotiate over people’s rights, to cancel the bailout.”
He pointed to the huge bank loan package deal between the EU and Spain on Sunday, arguing a bailout was possible without the kind of drastic cuts demanded of Greece.
“Spain negotiated and succeeded in taking financial support without a fiscal consolidation package, despite the lenders’ threats and blackmail,” Alexis Tsipras said.
Interviewed by Spanish daily El Pais, Jens Weidmann called for the eurozone to impose broad conditions on Spain over its loan package, worth up to 100 billion Euros.
He warned that Greece, but also the Irish Republic and Portugal, had been given the impression that this was a “rescue with no conditionality outside the financial system” and this was “already eroding the commitment to the terms of the existing programmes”.
“But foot-dragging on addressing the structural problems will perpetuate the crisis, and the market reaction reflects this concern,” Germany’s top banker said.
On Friday evening, New Democracy leader Antonis Samaras is expected to address his supporters in the capital’s Syntagma Square, near the Greek parliament.
Antonis Samaras, who wants to ease the bailout conditions, has accused anti-bailout parties of “playing poker” with Greece.
“There is the path of responsibility, in which you are clear about what you want, and we say we want the euro and re-negotiation [of the bailout],” he said, quoted by Reuters news agency.