Greek left leader insists on canceling bailout

(AP) ATHENS, Greece - The head of Greece's radical left-wing Syriza party, who has a strong chance of winning Greece's critical weekend elections, insisted on Tuesday that the continued implementation of the country's bailout conditions would be catastrophic.

Alexis Tsipras, whose party came a surprise second in inconclusive May 6 elections, said he would stick to his pledge to tear up Greece's bailout deal, saying the austerity the country has been forced to impose in return for billions of euros in rescue loans was leading Greece towards collapse.

If Greece reneges on its pledges to reform its economy, the other European countries and International Monetary Fund who have extended it billions of euros in rescue loans could pull the plug on the funding, forcing the country out of Europe's joint currency.

But Tsipras said he hoped to convince European leaders that such a scenario would pose a danger to the continued existence of the 17-nation joint currency itself.

"If one of the 17 countries is brought to collapse ... the fire will become unquenchable and will not be limited to Greece and the southern countries ... it will break up the eurozone and that will not be in anybody's interests," he said during a news conference.

No party won enough votes on May 6 to form a government, and coalition talks collapsed after 10 days, leading the country to hold a repeat ballot on June 17. Opinion polls published before a two week pre-election ban showed Syriza neck-and-neck with the conservative New Democracy party, which came first on May 6.

However, they indicated that again no party would win enough parliamentary seats to form a government. This means that unless parties can agree on a coalition government, a third election will have to be held.

Tsipras insisted that a government must be formed fast, without the drawn-out negotiations that occurred in May.

"The country must have a government on the 18th," he said. "Not on the 19th, not on the 20th or the 21st."

Burdened by a massive debt and huge budget deficit, Greece has been dependent on the EU-IMF rescue loans since May 2010, when it became locked out of the international bond market by sky-high interest rates.

The country has continued raising small amounts through treasury bill sales. On Tuesday, it raised 1.625 billion euro ($2 billion) in an auction of 26-week treasury bills, but at a relatively hefty interest rate that rose from a similar debt sale last month.

Tuesday's auction saw the yield increase to 4.73 percent from 4.69 percent in the last such auction on May 8. Demand was 2.14 times the amount on offer, weaker than in May, when it was 2.6 times the offer.