ND confident of coalition deal

New Democracy expects to be able to form a coalition government with Pasok, allowing the two parties that dominated politics for decades to share power despite a major anti-establishment election vote.

ND leader Antonis Samaras has promised to negotiate less punishing terms for the country's bailout, after only narrowly beating Syriza, which ran a campaign scrap the austerity deal entirely.

A senior ND official expected agreement soon on a new cabinet with the Pasok and possibly the moderate Democratic Left.

Speaking late on Monday, he said a deal would be reached on Tuesday that would involve more than a symbolic involvement by Pasok in the government.

"They will participate actively," said the official, who declined to be identified.

"Political leaders should be aware of the fact that this government is Greece's last chance to remain in the eurozone," the centre-left daily Ta Nea said in an editorial.

"The Greek people are ready to reward the parties that manage to ease austerity and punish those that raise voices of dissent," it said.

The comment underscored the widespread expectation that a new government will be able to negotiate an easing in the tough conditions of the bailout despite resistance from Germany.

The greatly weakened Pasok, which finished third in Sunday's vote, has yet to commit to supporting Samaras, but its leader, Evangelos Venizelos, said talks must be wrapped up by Tuesday – signalling a deal would be agreed by then.

The Democratic Left, which opposed the bailout, has also suggested it will offer conditional support to a government led by Samaras.

Venizelos met with the head of the Democratic Left, Fotis Kouvelis, shortly after 10am to gauge support for a three-way alliance with their traditional ND rivals.

"I am optimistic that this time they will agree to form a government," a Greek banker who declined to be named told Reuters. "They have realised that there is no margin of error or further delays. A third election would be a disaster."

With ND taking a 50-seat bonus under the electoral law for coming first, a New ND-Pasok alliance would have 162 seats, a majority in the 300-seat parliament. Adding the Democratic Left would give it 179 seats.

Source: Reuters