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Greece pro-bailout parties could form govt

3:07 PM, Jun 17, 2012   |    comments
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ATHENS, Greece (AP) - The pro-bailout New Democracy party came in first Sunday in Greece's national election and could gather enough support to form a pro-bailout coalition to keep the country in the eurozone.

As central banks stood ready to intervene in case of financial turmoil, Greece held its second national election in just six weeks to try to select a new government after an inconclusive ballot on May 6.

Sunday's vote was seen as crucial for Europe and the world, since it could determine whether Greece is forced to leave the joint euro currency, a move that could have potentially catastrophic consequences for other ailing European nations and the global economy.

Although official projections late Sunday showed that no party will win enough seats in the 300-member parliament to form a government on its own, Greece's two traditional parties -- the conservative New Democracy and the socialist PASOK -- would have enough seats to form a coalition together.

They have both expressed a willingness to work with other European nations to stay in the 17-nation eurozone.

The projections showed New Democracy winning 29.5 percent and 128 seats. The radical left Syriza party, which has vowed to repeal Greece's international bailout deal, was expected to come in second with 27.1 percent and 72 seats. PASOK trails with 12.3 percent and 33 seats.

To form a majority government, a coalition would need at least 151 seats.

The parties vying to win have starkly different views about what to do about the euro240 billion ($300 billion) in bailout loans that Greece has been given by international lenders.

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.

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.

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.

"There are many power-sharing possibilities that include a vote of tolerance from parties," Syriza member Nikos Voutsis said on state television. "But we'll see.""

The party that comes first in Sunday's vote gets a bonus of 50 seats in the 300-member Parliament and gets the first try at forming a new government with a majority in Parliament. If they fail, the next highest party gets to try.

Earlier, the exit polls projected seven parties in all 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.

The small Democratic Left party was projected at winning between 5.5 and 6.5 percent, with the right-wing Independent Greeks tied with Golden Dawn at 6-7.5 percent.

There are no rules governing a country's exit from the eurozone.

A Greek exit could cause economic chaos in Europe, prompt investors to flee stocks in the U.S. , and spark a panic that other debt-strapped European nations -- Portugal, Ireland, Spain and Italy -- might also have to leave the eurozone.

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.

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.

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.

"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."

Samaras, meanwhile, 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.

Earlier Sunday, 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 shortly before polls closed. The attack -- the only one reported so far -- took place in the Athens neighborhood of Exarhia, a traditional haven for leftists and anarchists.

Greek police were also 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 devices as an attempt to spoil the smooth running of the election.

The Associated Press

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