Greek conservatives win, easing fears of global financial turmoil
Sunday, June 17, 2012
ATHENS, Greece (AP) — Fears of an imminent Greek exit from Europe’s joint currency receded Sunday after the conservative New Democracy party came first in a critical election and pro-bailout parties won enough seats to form a joint government.
As central banks stood ready to intervene in case of financial turmoil, Greece held its second national election in six weeks after an inconclusive ballot on May 6.
With one party advocating ripping up Greece’s multibillion-euro bailout deal, the election was seen as a vote on whether Greece should stay in the 17-nation joint euro currency. A Greek exit would have had potentially catastrophic consequences for other ailing European nations, the United States and the entire global economy.
With 82.5 percent of the vote counted, official results showed New Democracy winning 30 percent and 130 of the 300 seats in Parliament. The radical anti-bailout Syriza party had 26.6 percent and 71 seats and the pro-bailout Socialist PASOK party came in third with 12.5 percent of the vote and 33 seats.
The anti-immigrant nationalist Golden Dawn party had 6.9 percent and 18 seats, while the Democratic left won 6.1 percent and 18 seats.
The parties have starkly different views about what to do about the $300 billion in bailout loans that Greece has been given by international lenders, and the harsh austerity measures that previous Greek governments had to accept to get the funds.
New Democracy leader Antonis Samaras cast Sunday’s choice as one between keeping the euro and returning to Greece’s old currency, the drachma. He has vowed to renegotiate some of the bailout’s harsher terms but insists the top priority is for the country to remain in Europe’s joint currency.
“The Greek people today voted for Greece to remain on its European path and in the eurozone,” Samaras said after his party won. “(Voters chose) policies that will bring jobs, growth, justice and security.”
Syriza chief Alexis Tsipras, who had tapped into a vein of deep anger over the plunging living standards faced by many Greeks, had wanted to rip up Greece’s international bailout deals and roll back the new taxes, job cuts and pension cuts imposed in the last two years.
That plan will have to wait, since the party that comes in first — New Democracy — gets the first stab at forming a new majority in Parliament. If they fail, the next highest party gets to try.
Tsipras congratulated Samaras and conceded the election.
The head of Greece’s socialist PASOK party, meanwhile, proposed that a unity government be formed of four top parties, including Syriza despite its anti-bailout views.
The White House is congratulating the Greek people for holding that country’s election in difficult times.
The statement from the press secretary called on Greece to quickly form a new government that can make “timely progress” on the economic challenges facing the Greek people. The White House called on Greece to remain in “the euro area while respecting a commitment to reform.”
The White House promised to engage Greece in the spirit of partnership” that has long guided the alliance between U.S. and Greece.
Sunday’s result is likely to relieve investors, but stock analysts were already warning that any bounce for financial markets could be short-lived.
“Treat knee-jerk market rallies with caution,” Neil MacKinnon, global macro strategist at VTB Capital, advised clients. He warned there were still too many questions about Europe’s handling of its debt crisis, plus warning signs of a slowing global economy, to celebrate the vote.
Use the comment form below to begin a discussion about this content.
Please review our Policies and Procedures before registering or commenting