Defiant Greek leftist refuses to back austerity

ATHENS (Reuters) - Greece's surging leftist leader predicted on Thursday his party would sweep next month's election and refused to stop demanding an end to "barbaric" austerity policies he said were bankrupting the nation.

Increasingly worried about Greece's future in the euro zone, foreign lenders and mainstream parties have stepped up warnings that the country risks being cut off from aid if it fails to stick to spending cuts included in its latest bailout package.

SYRIZA leader Alexis Tsipras, the 37-year-old rising star of Greek politics, promised he would listen to neither group.

"They are trying to terrorize the people to make SYRIZA cave in. We will never compromise," the ex-Communist student leader told his party's lawmakers, often addressing them as "comrades".

"We will never participate in a government to rescue the bailout."

Polls conducted after an inconclusive May 6 vote suggest SYRIZA is on track to surpass the conservatives to become the biggest party in parliament when Greeks vote on June 17.

Enraged with repeated rounds of austerity that have slashed wages and sent jobless rates soaring, voters have shrugged off warnings from leaders like European Commission President Jose Manuel Barroso, who said Greeks must choose wisely in the vote to avoid pushing the country out of the euro zone.

Tsipras, who has charmed voters with his good looks and promise to tear up the bailout deal while keeping Greece in the euro, said the mood among voters would not change and predicted SYRIZA would have twice as many lawmakers in a month's time.

"The Greek people voted for an end to the bailout and barbaric austerity. They ignored the threats and the cheap propaganda. And we are certain they will do the same now," Tsipras said.

"The people will complete on June 17 the great step forward they took on May 6, regardless of what Mr. Barroso says."

The latest poll, conducted by Pulse for the To Pontiki newspaper on May 15-16 showed SYRIZA taking 24.5 percent of the vote in the election, putting it ahead of all other parties. First place comes with a bonus of 50 extra seats in the 300 seat parliament, which went to the conservatives last time.

"EXTREMELY EXPENSIVE"

Greece's long-running economic crisis turned into a full political crisis after parties opposed to the terms of a 130-billion-euro ($168 billion) bailout made strong gains in the May 6 vote, leaving the country without a government and raising the odds that it would renege on terms of the deal.

Earlier this week, the country's president said Greeks had withdrawn up to 800 million euros ($1 billion) from banks as the political uncertainty deepened. In a further blow, the European Central Bank said it had halted liquidity operations with some Greek banks because their capital was too depleted.

Fears that Greece's dire state could drag the euro zone deeper into crisis kept markets on edge across the globe on Thursday, and IMF chief Christine Lagarde warned of "extremely expensive" consequences if Greece were to leave the euro zone.

An emergency government led by a judge and made up of mainly professors, technocrats and a few politicians that will lead the nation to next month's election was sworn in on Thursday in a ceremony presided over by the Archbishop Ieronimos of Athens.

Caretaker Prime Minister Panagiotis Pikrammenos's cabinet includes senior finance ministry official George Zanias as the new finance minister and Petros Moliviatis, a former conservative minister, who has the foreign affairs portfolio.

As Greece's chief economic adviser, Zanias has participated in meetings of euro zone finance ministers and was involved in negotiating the bailout and a debt restructuring.

At his first cabinet meeting, Pikrammenos told the ministers they would receive no salary for their month in office and urged them to dispense with frills like limousines or business trips, saying they should not be an additional burden for the country.

The parliament that was elected on May 6 also convened for a brief session on Thursday, when lawmakers from the far-right Golden Dawn party marched into parliament for the first time.

Deputies from the party, whose members give Nazi-style salutes and whose leader has denied there were gas chambers in Nazi concentration camps, refused to stand when three Muslim lawmakers were sworn in on the Koran during the oath ceremony.

The parliament is expected to be dissolved later this week ahead of the election in June.

Pikrammenos's predecessor Lucas Papademos implored Greeks to choose wisely in the vote, since their nation now stood at a crossroads with its euro zone membership at stake.

"Some would like to see Greece become weak and out of the euro zone and the European Union. Some are expecting to take advantage of the chaos that would follow a humiliating exit of the country from the euro zone," the former prime minister wrote in an open letter posted on his website.

"We must not give them the chance to speculate against Greece." ($1 = 0.7828 euros)

(Additional reporting by Tatiana Fragou and Harry Papachristou,; Writing by Deepa Babington; editing by Janet McBride)

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