People vote inside booths during the elections in Thessaloniki, Sunday.
Nikolas Giakoumidis, Associated Press
Antonis Samaras, leader of the New Democracy conservative party leaves an elections kiosk after speaking to his supporters at Syntagma square in Athens.
Petros Karadjias, Associated Press
Vote in Greece eases world angst
- Article by: RACHEL DONADIO
- New York Times
- June 18, 2012 - 5:10 AM
ATHENS - Greek voters on Sunday gave a narrow victory in parliamentary elections to a party that had supported a bailout for the country's failed economy. The vote was widely seen as a last chance for Greece to remain in the eurozone, and the results had an early rallying effect on world markets.
Greece's choice was also welcomed by the finance ministers of the eurozone countries, who in a statement Sunday night in Brussels said the outcome of the vote "should allow for the formation of a government that will carry the support of the electorate to bring Greece back on a path of sustainable growth."
While the election afforded Greece a brief respite from a rapid downward spiral, it is not likely to prevent a showdown between the next government and the country's so-called troika of foreign creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- over the terms of a bailout deal. Even the most pro-Europe of Greece's political parties, the conservative New Democracy, which came in first Sunday, has said that a less austere agreement is crucial to a country where the unemployment rate is 22 percent and the prospect of social unrest is rising.
The eurozone ministers pledged to help Greece transform its economy and said continued fiscal and structural changes were the best way for Athens to cope with its economic challenges. "The Eurogroup reiterates its commitment to assist Greece in its adjustment effort in order to address the many challenges the economy is facing," the statement said.
The ministers added that representatives of Greece's creditors would return to Athens to discuss emergency loans and changes as soon as a government is in place.
Official projections showed New Democracy with 30 percent of the vote and 128 seats in the 300-seat parliament. The Syriza Party, which had surged on a wave of anti-austerity sentiment and spooked Europe with its talk of tearing up Greece's loan deal with its foreign creditors, was in second place, with 27 percent of the vote and 72 seats. Syriza officials had rejected calls for a coalition, ensuring its role as a vocal opposition bloc to whatever government emerges.
But unlike in the May 6 election, when New Democracy placed first but was unable to form a government, this time intense international pressure -- and the fact that the Greek government is quickly running out of money -- made it likely there would be a coalition with New Democracy's longtime rival, the socialist PASOK Party. PASOK placed third in the voting, with 12 percent of the vote and 33 seats. The extreme right Golden Dawn party got 18 seats.
Investors gave an early thumbs-up on Sunday night, pushing up the euro in value against the dollar.
"It looks like we've avoided the worst-case scenario," said Darren Williams, a European economist for AllianceBernstein in London. "I think that's important, because we could have gone to a very bad place very quickly."
Previous rallies in response to developments in Europe were short-lived. A few weeks ago, markets initially responded positively to a bailout plan for Spanish banks, but that optimism quickly gave out when the U.S. stock markets opened that Monday.
The health of the world economy weighs heavily on the United States, and on President Obama's re-election campaign. In recent days, Obama has increased the pressure on European leaders to find longer-term solutions to shoring up the euro. A White House statement on Sunday said, "As President Obama and other world leaders have said, we believe that it is in all our interests for Greece to remain in the euro area while respecting its commitment to reform."
In a sign of the high stakes for global financial stability, the finance ministers, the White House and the European Commission urged Greek political leaders to form a government quickly. Under the current loan agreement, the next government has just weeks to determine how to slash the equivalent of 5 percent of the country's gross domestic product to meet budget-reduction targets.
In a victory statement on Sunday evening, the New Democracy leader, Antonis Samaras, called for the formation of a government of national unity aimed at keeping Greece in the eurozone and renegotiating the loan agreement.
© 2013 Star Tribune