Pro-bailout parties in Greece to attempt to form coalition

 

Parties committed to Greece's bailout were on course to secure a parliamentary majority tonight and the radical leftists who had vied for first place conceded defeat in an election that could keep the debt-laden country in the euro zone.

An official projection released by the interior ministry showed conservative New Democracy taking 30.1 per cent, with the radical leftist Syriza bloc just behind on 27.1 per cent.

The Pasok socialists were set to take 12.6 per cent of the vote. Because of a 50-seat bonus given to the party which comes first, that result would give New Democracy and Pasok 163 seats in the 300-seat parliament, in an alliance committed to a €130 billion EU-IMF bailout keeping the country from bankruptcy.

"I am relieved," smiling New Democracy leader Antonis Samaras said, leaving his office to joyous chants from supporters.

"I am relieved for Greece and Europe. As soon as possible we will form a government."

Mr Samaras said in a speech that the country would honour its commitments to its euro zone partners.

"The Greek people voted today to stay on the European course and remain in the euro zone... there will be no more adventures, Greece's place in Europe will not be put in doubt," he said.

Syriza leader Alexis Tsipras, a 37-year-old former communist who has shot from obscurity to global celebrity in a matter of weeks, called Mr Samaras to concede defeat, a Syriza spokesman said.

The result, however, exposed a deeply divided society, and could leave an emboldened Syriza leading new protests against a coalition governing with significantly less than 50 per cent of the electorate's support.

Pasok leader Evangelos Venizelos called for a government that would include Syriza, but the radicals ruled out joining a coalition that would stick to the punishing bailout terms that have helped condemn Greece to five years of record recession. 

Mr Tsipras had vowed to tear up the terms, betting that European leaders cannot afford the financial market turmoil that could be unleashed by cutting a member of the euro zone loose.

The projection was based on votes counted on the spot at about 12 per cent of polling stations and sent to the ministry via text message.

It proved highly accurate in an earlier May 6th election, which produced stalemate, though the figures are subject to a margin of error which leaves a degree of uncertainty.

Earlier exit polls produced a similar result to the government projection, giving New Democracy and Pasok 159 seats combined.

Greece's lenders say a new government must accept the conditions of the bailout - on top of a €110 billion package in 2010 - or funds will be cut off, driving Athens into bankruptcy.

A Greek euro exit has the potential to unleash shocks that could even break up Europe's single currency and plunge the global economy into chaos.

The result will dominate a meeting of the Group of 20 world economic powers in Mexico tomorrow.

Central banks from major economies stand ready to take steps, including coordinated action, to stabilise markets if the election triggers a financial storm or public panic, G20 sources said last week.

They may well not be needed. The euro hit a three-week high against the US dollar, rising to around $1.2730 in early Australasian trade, from around $1.2655 late in New York on Friday.

"What stands out is how close Syriza came... so we expect some robust opposition to the austerity measures," said Daragh Maher, currency strategist at HSBC in London.

Reuters