Pro-bailout parties on course for Greek election victory

GREEK CENTRE-RIGHT leader Antonis Samaras was on course last night to seize a tight victory in a crucial election rerun, a result which will ease the immediate threat over the country’s membership of the euro.

Although the anti-bailout leftists of the Syriza movement performed very strongly, Mr Samaras’s New Democracy party was in line to emerge as the outright winner of the election and secure a crucial 50-seat bonus in the 300-seat parliament.

After months of political turmoil in Greece and fears for its participation in the single currency, Mr Samaras came under immediate pressure to rapidly form a government.

“The Greek people have spoken. We fully respect their democratic choice. We are hopeful that the election results will allow a government to be formed quickly,” said European Council president Herman Van Rompuy and EU Commission chief Jose Manuel Barroso in a joint statement.

Similarly, euro zone ministers said they looked forward to the swift formation of a new government.

If Mr Samaras takes office in the coming days, it would probably pave the way for the release of the rescue loan Greece needs to avoid running out of cash to pay public salaries and pensions in the middle of next month.

“The people of Greece have shown their will to stay anchored in the euro zone and honour our commitments,” Mr Samaras said in a victory speech delivered in Greek and English.

“They have voted for a European course and our stay in the euro. They voted for jobs, justice and safety. No more adventures.”

Official projections indicate Mr Samaras would command an ample majority if he aligns with his former arch-foes in the Pasok socialist movement to form a coalition to work the disputed EU-IMF programme.

With more than 82 per cent of the vote counted after midnight in Athens, New Democracy had 30 per cent of the vote. Syriza had 26.5 per cent and Pasok had 12.5 per cent. This would be enough to give New Democracy and Pasok 166 seats in parliament, a 15-seat majority.

European officials warned that the outcome was still “very messy” and that history showed the two parties would find it very difficult to reach an agreement to form a stable power-sharing administration.

“There’s a long way to go before anyone can breathe a sigh of relief,” said an advisor to a top-level figure who was closely examining the results coming through from Athens.

“Can these two parties, which have never been able to agree on anything, put together something that stands up?”

It was clear, however, that European leaders would not be confronted with a blunt repudiation of the EU-IMF deal which was threatened by Syriza leader Alexis Tsipras. Senior European figures believe this could have led Greece back to the drachma.

“Our proposal for the overthrow of the memorandum is the only viable solution for Greece and Europe,” Mr Tsipras said last night.

In France, meanwhile, newly-installed Socialist president Francois Hollande secured an outright parliamentary majority in the final round of the country’s legislative election.

This will make it easier for Mr Hollande to pursue a pro-growth agenda and, possibly, strengthen his hand in European talks on debt crisis.

The uncertainty over the fate of Greece has rocked markets, helping to send Spanish borrowing costs to new records and putting Italy under pressure. The debacle is set to dominate a summit of G20 leaders which begins today in Los Cabos, Mexico.

Although the turmoil still threatens to derail Ireland’s recovery, Taoiseach Enda Kenny said in Dublin last evening that he wanted Mr Samaras to prevail.

“This will be a cliff-hanger right to the end but I obviously have made it perfectly clear that I hope that Mr Samaras can come through here and that Greece can remain part of the euro and we can get on to dealing with this euro crisis and sort it out.”

Difficult talks lie ahead with Athens as Mr Samaras has vowed to renegotiate the EU-IMF plan to ensure it promotes growth.

He received a boost last night when German foreign minister Guido Westerwelle suggested “something could be done about the timetable” of the austerity programme after a six-week standstill since the last election.

German finance minister Wolfgang Schäuble made no direct reference to the timeframe in a statement, saying only the EU-IMF “troika” would consult with a new Greek government to “form a view about the current situation”.

He said in a statement that Germany viewed the result as a “decision by Greek voters to forge ahead” with the EU-IMF reform programme.

“This path will be neither short nor easy but is necessary and will give the Greek people the prospect of a better future,” he said. “To succeed, the programme requires political stability.”