Courtesy AlJazeera

There is high drama evolving in Greek politics. Greek President Karolos Papoulias has called the leaders of Greece's political parties to meetings on Sunday, in a last-ditch effort to create a coalition government.

In the recently concluded election in the country, no political party had won a clear majority to run the nation. Now, at least three parties need to join forces to form a government (known as coalition). Greek politicians are deeply divided over how best to handle the debt crisis, and have failed to form a Government thrice this week.

The President first called on the leader of the New Democracy party, who was unable to put together a majority. When the leader of Syriza and PASOK (socialist) parties failed to put together a coalition as well, it leaves the President only one more chance -- to jointly meet with all the political parties and see if some Government can be cobbled together. If that attempt fails too, then new elections will need to be scheduled in June.

The plot

Greek President Karlos Papoulias with Evangelos Venizelos PASOK party leader

Greece is in the midst of deep economic turmoil. We had talked about it here. The Government had borrowed from international markets to pay for its excessive spending habits. Ultimately things began to catch up. Meanwhile Greece being a part of the European Union (EU), had benefited from the strong Euro (common European currency). 

A common currency has benefits when the going is good and shortfalls when a member nation is troubled. If Greece were to declare bankruptcy, it would impact all countries linked through the Euro. Over the last few years, the EU has been scrambling to help Greece by lending the Government money it needs to pay on its loans. But in exchange, the EU has demanded that Greece implement strictly austerity measures -- such as lower spending, increase taxes and reduce benefits and public services to its public. The austerity measures have taken a severe toll on the economy. The common man in Greece is disillusioned with the Government. 

Should Greece stay in the EU?

It is against this backdrop that the Greek elections were held recently. Prior to these elections, Greece had a two party system -- the New Democracy and the PASOK (socialist party). On the one hand, Greece is struggling to stay within the EU to reap the benefits of the Union. On the other hand, there is a call to leave the EU. 

Alexis Tsipras, the leader of the extreme left Syriza party has been seeing unexpected support, since voters are unhappy with the both the political parties and want to see a change in 2012. If Tsipras does not support the coalition, it will mean a re-election in June for Greece, and his party stands to benefit the most.

The world will be watching the Greek Presidential palace closely for signs of stability or otherwise in Greece and the Eurozone.