There is no desire among euro zone member states for Greece to leave the currency bloc, and no appetite on Greece's part either, a senior EU official said today.
The official was speaking to journalists ahead of a meeting of euro zone finance ministers on May 14.
He dismissed talk about the possibility of Greece leaving the currency, which has risen since the country held parliamentary elections on Sunday.
"I see no appetite for exit on the part of Greece (or) on the part of the 16 others," said the official, referring to the 17 members of the currency bloc.
"There is a lot of speculation on this issue, given the pronouncements of the leader of the second largest party in the elections," he said. But he added that he had no knowledge of any thinking along those lines.
Sunday's election saw the majority of Greeks vote for parties that are opposed to a €130 billion EU/IMF bail-out that calls for deep cuts in spending by the Greek government.
Greek socialists reach for coalition amid bail-out threats
Greek socialist leader Evangelos Venizelos was tasked today by President Carolos Papoulias with forming a government after efforts by other parties failed in the wake of inconclusive weekend polls.
"Our proposal is to create a unity government, a cooperation of pro-European forces," Venizelos said. He added that the task was "not easy" but was still "feasible."
"It is clear that the people want stability and want to avoid (new) elections," the former finance minister who helped negotiate a landmark debt cut said.
Venizelos, whose Pasok party came a distant third in the elections, is thought unlikely to succeed where the top-seeded New Democracy conservatives and the second-placed Syriza radical leftists could not.
A fresh setback would result in Papoulias calling on parties to form an emergency coalition. If that cannot be be done by May 17, new elections will be called.
The Athens stock exchange kept a brave face, opening positively and closing with gains of over 4%.
Voters on Sunday slammed both Pasok and New Democracy for having pushed through punishing austerity measures in return for international loans in the last interim coalition government.
The election slashed the two parties' combined presence in the 300-seat chamber to just 149 - including a 50-seat bonus for New Democracy for being the largest party - from 201 in the previous parliament. The other 151 seats are held by parties that campaigned against the austerity programme, from far-left groups such as the communists and Syriza to the neo-Nazi Golden Dawn, which won 21 seats.
However, given their insurmountable differences, repeat elections are now almost certain. "We will probably have elections in two months" even if a cabinet is formed, said Communist party leader Aleka Papariga.
Meanwhile, the European Union is sending a strong message that Greece must honour the rescue conditions of budget cuts and deep reforms, after Venizelos and New Democracy leader Antonis Samaras said growth-boosting changes would be sought.
"The (loan agreement) is a continuous renegotiation, we have a new text, new terms every two months," Venizelos said.
But creditors have warned that a rescue loan instalment to be paid today could be the last if Athens reneges on its reform commitments, raising questions over the future of Greece in the euro zone.
In Brussels, a European Union official told AFP that Greece would receive a €4.2 billion loan as expected today, but a further €1 billion would be held back until Monday.
Euro zone officials who met last night "decided to leave the decision on disbursement of €1 billion to the Eurogroup on Monday," said the source, referring to a scheduled meeting of euro zone finance ministers.
Luxembourg Foreign Minister Jean Asselborn warned yesterday that future loans would not be forthcoming unless Greece installed a stable government. German Chancellor Angela Merkel said in a speech to lawmakers in Berlin today that there was no "magic bullet" to resolve Europe's debt crisis.
Her comments were aimed mainly at incoming French president Francois Hollande's insistence on a growth-based model as a response to the crisis, but also at Greece, whose leaders have seized on Hollande's election last week as leverage in their demands for a renegotiation of their bail-out terms.
