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Published 18 June 2012 08:02, Updated 19 June 2012 07:12
New Democracy leader Antonis Samaras leaves an election kiosk after speaking to his supporters at Syntagma square in Athens on Sunday. Samaras claimed victory in the poll and now faces the challenge of forming and maintaining a pro-bailout ruling coalition. Photo: AP
Pro-bailout forces have claimed victory in Greece’s critical national election, giving the conservative New Democracy party the challenge of forming a ruling coalition and a stable government in the face of ongoing tough austerity measures.
New Democracy leader Antonis Samaras claimed victory over radical left party Syriza in the close fought poll on Sunday, declaring that the win was a signal of Greece’s desire to remain part of the euro zone.
Samaras declared victory after tallies showed New Democracy narrowly beating Syriza with 29.53 per cent of the vote to 27.12 per cent. The pro-bailout Pasok party ran third with 12.3 per cent of the vote, setting up a potential coalition government with around 161 seats in the 300 seat Greek parliament.
“The Greek people today voted for the European course of Greece and that we remain in the euro,” Samaras told supporters in Athens. “This is an important moment for Greece and the rest of Europe.”
Samaras also maintained that the outcome of the country’s second national election in less than two months meant that Greece should not be feared within the euro zone.
“We will not have a new adventure, we will not doubt the position of Greece in Europe. We won’t be feared,” the New Democracy leader said. “We don’t have time for small-time politics. We must bring development into the economy and assurances that we’re past the worst. We will respect the signatures and promises that we’ve made.”
Political leaders and investors are likely to breathe a sigh of relief in the wake of the vote, which helped push the euro and the Australian dollar higher on Monday morning.
Central banks were poised to take firm action to stabilise financial markets should the outcome of the election have exacerbated market tensions, with voting coming ahead of a meeting of G20 leaders in Los Cabos early this week.
However, much doubt continues to surround the future of Greece, with the election result likely to yield only a slender governing majority for bailout forces should New Democracy succeed in cobbling together a ruling coalition.
Syriza has already said it will not join in forming government and the anti-bailout party is expected to mount a strong opposition to austerity measures required under a European Union-International Monetary Fund bailout program.
Pasok, which is led by former Greek finance minister Evangelos Venizelos, has called for New Democracy to include Syriza in a unity coalition, but political experts suggest Pasok will come under intense pressure to drop the requirement and join New Democracy in governing Greece.
If New Democracy fails to assemble a coalition government, Greeks will be forced back to the polls again leading to yet another period of political uncertainty for the company, which has already suffered additional financial pain thanks to its failure to elect a government during its May national vote.
Even if New Democracy does succeed in garnering the support of Pasok and other pro-bailout parties to rule, many remain sceptical that it will be able to stay in power given its likely slim majority and the propensity of Greek politicians to defect in the face of unpopular decisions.
In early June, billionaire investor George Soros painted a picture in which a conservative victory in Greece would give Europe and three-month window to get its financial crisis under control.
“I expect that the Greek public will be sufficiently frightened by the prospect of expulsion from the European Union that it will give a narrow majority of seats to a coalition that is ready to abide by the current agreement. But no government can meet the conditions so that the Greek crisis is liable to come to a climax in the fall,” Soros said at the time.
“By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months’ window.”
It remains to be seen how close to the mark Soros’ prediction is.