Rival Greek parties set to form coalition

ATHENS, Greece, June 19 (UPI) -- Rival Greek political parties backing the nation's bailout but seeking to soften its terms were expected to form a coalition government Tuesday, officials said.

The conservative New Democracy party received coalition support from longtime rival the Panhellenic Socialist Movement, known as PASOK, and the small Democratic Left social-democratic party, the officials said.

The anti-bailout Coalition of the Radical Left, known as Syriza -- which finished a close second in Sunday's parliamentary election -- and the right-wing anti-austerity Independent Greeks party, which came in fourth after PASOK, rejected invitations to join the coalition, vowing to be a vocal political opposition.

New Democracy leader Antonis Samaras met with the leaders of all the potential coalition partners Monday after receiving the mandate from President Karolos Papoulias to form a government.

While PASOK pressed to put several of its officials in ministerial roles, Samaras, in line to become prime minister, suggested 30 percent of the new Cabinet be composed of non-political figures, the Greek newspaper I Kathimerini reported Tuesday.

Samaras had campaigned with a promise to ease the Greek bailout's austerity conditions.

He beat Syriza leader Alexis Tsipras -- who had campaigned with promises to tear up the austerity agreement entirely -- by only a 2.8 percent margin.

The New Democracy and PASOK parties were working on a proposal to ask the other eurozone countries for an extra two years to meet Greece's fiscal targets, officials involved in the preparations told The Wall Street Journal.

The request would mean that on top of a more than $218 billion bailout plan agreed to this year, Greece would need an additional $20 billion in financing from Europe, the officials told the newspaper.

Athens is expected to present its request for softer aid terms as early as Thursday, the first day of a two-day meeting of eurozone finance ministers in Luxembourg.

The issue was widely expected to be further discussed when the leaders of all 27 European Union countries meet for a formal summit in Brussels June 28-29, eurozone officials said.

Under its current bailout plan, Greece must reach a budget surplus, not including debt-service costs, of around 4.5 percent of gross domestic product from 2014 onward, compared with a 2011 deficit of 5 percent of GDP.

Greece's expected proposal would give the country until 2016 to reach the surplus target. A slower timetable would, in the meantime, add to Athens's borrowing needs.

Greece has more than 22 percent unemployment -- and more than 50 percent unemployment among young workers. Its economy, burdened with deep fiscal retrenchment, is expected to contract as much as 7 percent this year.

German Chancellor Angela Merkel, leading northern Europe's creditor nations, told a news conferences at the summit of the Group of 20 leading industrial and developing economies in Los Cabos, Mexico, that Greece's leaders "must fulfill their commitments quickly" under the bailout deal.

"There won't be any changes to the memorandum of understanding" setting out the fiscal and other overhauls Athens must make in return for aid, she said.