Published June 17, 2012
ATHENS, Greece – 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 €240 billion ($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.”
Menelaos Hadjicostis and AP television in Athens contributed, as well as Paul Wiseman in Washington.
Breitbart.com: Greek polls: Pro-bailout conservatives in first
Another exit poll carried out for a separate TV station projected Syriza as possibly being marginally ahead, at between 25 and 31 percent compared to New Democracy’s 25 to 30 percent.
Neither party will have enough seats in the 300-member Parliament to form a government, meaning talks on forming a coalition government will almost certainly begin Monday.
“The result is still unclear. … Of course there are many power-sharing possibilities that include a vote of tolerance from parties,” ranking Syriza member Nikos Voutsis said on state television. “But we’ll see.”
The two parties vying to win have starkly different views about what to do about the (EURO)240 billion ($300 billion) in bailout loans that Greece has been given by international lenders.
Syriza head Alexis Tsipras, a 37-year-old former student activist, has vowed to cancel the terms of Greece’s international bailout deal and repeal its austerity measures _ a move many think will force Greece to leave the 17-nation eurozone.
New Democracy leader Antonis Samaras says his top priority is to stay in the euro but has promised to renegotiate some terms of the bailout.
Whichever party comes first in Sunday’s vote gets a bonus of 50 seats in the 300-member Parliament.
The exit polls projected a total of seven parties beating the 3 percent threshold for seats in Parliament, including the extremist right-wing Golden Dawn party, which vehemently rejects the neo-Nazi label but has been blamed for numerous violent attacks against immigrants.
Golden Dawn was projected at winning between 6 and 7.5 percent, roughly maintaining the level of the nearly 7 percent it won in May _ a meteoric rise for a fringe party that had polled at just 0.3 percent.
Sunday’s vote looked set to confirm the plunging popularity of the formerly governing socialist PASOK party, which won a landslide in 2009 with nearly 44 percent and was now projected at between just 10-12 percent. Still, it could be a potential coalition government partner for New Democracy, with the two former arch-rivals now roughly sharing opinions on how to handle Greece’s bailout commitments.
The small Democratic Left party, which was seen as a potential kingmaker in the May coalition negotiations, was projected at between 5.5 and 6.5 percent, with the right-wing Independent Greeks was tied with Golden Dawn at 6-7.5 percent.
Greece has been dependent on rescue loans since May 2010, after sky-high borrowing rates left it locked out of the international markets following years of profligate spending and falsifying financial data. The spending cuts made in return have left the country mired in a fifth year of recession, with unemployment spiraling to above 22 percent and tens of thousands of businesses shutting down.
There are no rules, however, governing a country’s exit from the eurozone, and a Greek exit could spark a panic that other debt-strapped European nations _ Portugal, Ireland, Spain and Italy_ might also have to leave.
That domino scenario _ known in economic terms as contagion _ could engulf the euro, causing a global financial panic not unlike the one that gripped the world in 2008 after the investment firm Lehman Brothers failed in the U.S.
The vote also came after a difficult week for Spain and Italy, which saw their borrowing costs soar. Tens of thousands of Italian workers rallied Saturday in Rome to protest pension cuts, tax hikes and labor reforms.
Tsipras, has vowed to rip up Greece’s bailout agreements and repeal the austerity measures, which have included deep spending cuts on everything from health care to education and infrastructure, as well as tax hikes and reductions of salaries and pensions.
But his pledges, which include canceling planned privatizations, nationalizing banks and rolling back cuts to minimum wages and pensions, have horrified European leaders, as well as many Greeks. Tsipras’ opponents argue that the inexperienced young politician is out of touch with reality, and that his policies will force the country out of the euro and lead to poverty for years to come.
Virtually unknown outside of Greece four months ago, Tsipras and his party shot to prominence in the May 6 vote, where he came a surprise second and quadrupled his support since the 2009 election.
Journalists and television news crews from across the world jostled for space to see Tsipras vote Sunday in Athens.
“We have beaten fear. Today we open a road to hope,” Tspiras said, adding that he was confident of victory. “Today we open a road to a better tomorrow, with our people united, dignified and proud. In a Greece of social justice and prosperity, an equal member of a Europe that is changing.”
The young left-wing leader has accused his rivals of attempting to terrorize the population by casting him as the man who will ruin the country. He insists he will keep Greece within the euro _ something that opinion polls have shown about 80 percent of Greeks want _ but European leaders have made it clear there is no room for Greece to reject the bailout and stay in the eurozone.
Samaras, meanwhile, has cast Sunday’s choice as one between the euro and returning to 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.
“Today the Greek people speak. Tomorrow a new era for Greece begins,” Samaras said after voting in southern Greece.
Small-scale violence was reported on election day in Athens. About 10 men armed with sledgehammers and wooden bats attacked a polling station in central Athens, wounding two policemen guarding it and setting fire to the ballot box half an hour before polls closed. The attack _ the only one reported so far at a voting station during the balloting _ took place in the Athens neighborhood of Exarhia, a traditional haven for leftists and anarchists near the city center.
Separately, Greek police were investigating the discovery Sunday of two unexploded hand grenades outside private Skai television station on the outskirts of Athens. Greek government spokesman Demetris Tsiodras denounced the action as an attempt to spoil the smooth running of the elections.
Strong winds in the Greek archipelago also forced the cancellation of some ferry routes Sunday, raising doubts about whether some voters would be able to get to island polling stations.
Menelaos Hadjicostis, Demetris Nellas and AP television in Athens contributed.