Greek Socialist party head, Evangelos Venizelos, has failed in his bid to form a government after the radical leftist party ruled out joining a coalition. Snap elections in Greece now look increasingly likely.
Leader of Greece's socialist PASOK party, Evangelos Venizelos, admitted on Friday to failing in his attempts to form a government.
The former finance minister was the last of three party leaders to hold talks aimed at reaching an agreement following Sunday's inconclusive election.
Venizelos will now hand the mandate back to the country's president, Carolos Papoulias. The president is expected to convene with party leaders this Saturday in a last-ditch attempt to form an emergency unity government.
"I am going to inform the president of the republic tomorrow [Saturday] and I hope that during the meeting with Carolos Papoulias, each party will assume its responsibilities," Venizelos said.
The parties have until Thursday to reach a compromise or face snap elections next month.
Radical Left rules out austerity
Venizelos' announcement came after meeting with the head of the Radical Left Coalition (Syriza), Alexis Tsipras, who reportedly ruled out joining a coalition which backed the country's stringent austerity measures.
Tsipras, whose party came second in Sunday's election, said he would not join any government that intended to continue implementing the terms of Greece's EU-International Monetary Fund bailout deal.
"It is not Syriza which is rejecting (its participation in a coalition) but it is the verdict of the people of Greece," party chief Alexis Tsipras said on Friday. The pro-austerity socialist PASOK party and conservative New Democracy party both suffered in Sunday's election for their handling of the financial crisis.
Germany issues Greece a warning
Germany warned on Friday, however, that Greece must honor the bailout conditions and introduce reforms, if it wished to receive more financial aid from the European Union.
"We want to help Greece and we will help Greece. But Greece has to want to be helped. If they deviate from the agreed reform path, then the payment of further tranches of aid is not possible," German Foreign Minister Guido Westerwelle said.
Meanwhile German Finance Minister Wolfgang Schäuble said in an interview with the Rheinische Post newspaper that Europe would survive if Greece decided to exit the euro.
"We want Greece to remain in the eurozone," Schäuble said. "But it also has to want this and to fulfill its obligations. We can't force anyone. Europe won't sink that easily."
ccp/ipj (AFP, AP, Reuters, dpa)