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Greek unity talks founder amid doubts on euro

Critical talks to form a governing coalition in crisis-stricken Greece foundered once more, leading the country one step closer to new elections -- and bringing its continued presence in the euro into serious doubt.

Last-ditch efforts by President Karolos Papoulias to broker a deal between wrangling party leaders ended with no deal in sight late Sunday, a week after national elections produced a deadlock, with no party winning enough seats to form a government.

State television said talks would continue this evening between the heads of the parties that came in the top three spots in the elections, the conservative New Democracy, radical left-wing Syriza and socialist PASOK, plus the head of the small Democratic Left party, which is in a kingmaker position.

But Syriza said that it would not attend the talks, state TV said, throwing the entire meeting into question.

Syriza leader Alexis Tsipras campaigned on a platform for Greece to pull out of its commitments in the international bailout agreement, which has given the country billions in rescue loans. He has insisted he can't back a government that won't overturn the austerity measures taken in return for the bailout.

"Syriza refuses to be a left-wing alibi for a government that will continue the policies the people rejected on May 6," NET state TV quoted Tsipras as saying.

Spokesmen for the three other parties said they would attend tonight's meeting.

Voters furious at the handling of Greece's financial crisis and two years of austerity measures taken in return for the bailout loans punished the formerly dominant PASOK and New Democracy, which saw their support crumble to historic lows. Syriza made big gains, more than tripling its popularity to come in second place after campaigning on an anti-bailout platform.

New Democracy leader Antonis Samaras, PASOK head Evangelos Venizelos and Democratic Left chief Fotis Kouvelis agree that a coalition must be formed in an effort to guarantee Greece's continued presence in the euro, but have insisted that it must have the participation or at least the support of Syriza.

In return for $310 billion in rescue loans from the European Union and International Monetary Fund, Greece has imposed severe spending cuts, including slashing pensions and salaries in the public sector, and repeated rounds of tax increases. The austerity has left Greece mired in a fifth year of deep recession, with unemployment spiraling above 21 percent.

If no solution can be found, Greece will have to hold new elections next month, prolonging the political uncertainty.