Greek Socialist leader raises stakes in EU vote

ATHENS (Reuters) - The leader of Greece's junior coalition partner warned on Thursday that the government would be at risk if it performed poorly in next week's elections to the European Parliament.

Evangelos Venizelos, head of the Socialist PASOK party, has raised the stakes for the May 25 vote with a series of increasingly sharp warnings about government stability as he faces internal dissent and polls showing the once-powerful party is set to take a drubbing.

PASOK backs conservative Prime Minister Antonis Samaras' New Democracy party in a coalition that has enforced harsh austerity reforms, including drastic public sector cuts, in return for bailouts totalling 240 billion euros (196 billion pounds) from the European Union and International Monetary Fund.

The coalition has a slim two-seat majority in the 300-seat parliament, and next week is the first electoral test for Samaras since he took power in 2012.

"If the lawmakers of the majority parties feel that they have no room to manoeuvre ... if the main opposition brings the issue of legitimacy onto the table, there will be a very big problem," Venizelos told Greece's Star TV channel. "Will we be able to vote bills in parliament?"

The vote - and especially PASOK's performance - is being closely watched by financial markets for any sign of growing political risk in Greece, which remains dependent on aid from the EU and IMF despite a successful bond sale last month.

Venizelos said earlier this week he would be forced to hold discussions with Greece's president if his party performed badly, suggesting the country would be plunged into political crisis.

On Thursday, he said Greece would pay a high price if voters failed to back the coalition parties.

"Why is the question 'who comes first' crucial? It is crucial for the government's legitimacy," he said. "It is crucial because it is a big political dilemma which is not related to the EU elections as such, but with political stability on a parliamentary level."

PASOK is contesting the EU elections under the Elia (Olive) coalition that groups together six other centre-left movements.

The latest polls show the group coming in sixth place with about 6 percent of the vote, a humiliation for a party that once dominated Greek politics along with the conservatives. Samaras' New Democracy, remains close but behind the radical leftist Syriza in the latest surveys.

PASOK, which won the 2009 national elections with 42 percent of the vote, has struggled to recover since being punished for Greece's economic crisis in 2012, when its share shrank to just over 12 percent. It has since been riven by infighting, defections and questions over its future.

Venizelos denied he would resign or that PASOK would pull out of the government if it fared badly.

"But we would need to examine the reasons and the prospects for this government," he said. "This is a coalition government. PASOK is the progressive political force and without us, without the factor of stability ... there is nothing."

($1 = 0.7291 Euros)

(Writing by Deepa Babington; Editing by Mark Trevelyan)

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