Greek election victor to hold coalition talks

Associated Press

ATHENS, Greece (AP) – Greek conservative leader Antonis Samaras will launch coalition talks Monday after coming first in national elections that follow weeks of uncertainty over the debt-crippled country’s future in Europe’s joint currency.

The campaign was closely watched by global leaders and markets, as central banks stood ready to intervene in case of financial turmoil, as the Sunday’s election was seen as a vote on whether Greece should stay in the 17-nation group sharing the euro currency. A Greek exit would have had potentially catastrophic consequences for other ailing European nations, the United States and the entire global economy.

Leaders of the European Union appeared relieved that a pro-austerity government could now form. The group “is convinced that continued fiscal and structural reforms are Greece’s best guarantee to overcome the current economic and social challenges,” it said in a statement.

Asian stock markets climbed early Monday on the news, as did those in Greece, with Athens stocks gaining 3.2 percent in early trading.

Sunday’s vote “will probably ease fears of an imminent Greek euro exit,” said Martin Koehring of the Economist Intelligence Unit. “But the key question is how quickly can a government be formed?

With 129 of Parliament’s 300 seats, Samaras’ New Democracy party lacks enough legislators to govern alone, and must seek allies among the smaller pro-bailout Socialists.

But the deal that evaded Samaras after first elections on May 6 looks more attainable this time. With the Socialists’ backing he would control 162 seats, and could seek a further boost from the small Democratic Left party, which while opposing the country’s harsh austerity program has said it will do what is needed to help form a strong government.

Samaras will receive the presidential mandate to start power-sharing talks shortly after noon, after President Karolos Papoulias is handed the final election results.

With 99.95 percent of the ballots counted so far, New Democracy has 29.66 percent, followed by the Syriza radical left coalition at 26.89 percent.

Greece has survived for more than two years on rescue loans from its European partners and the International Monetary Fund. The vital bailouts are conditional on the country continuing with its deeply unpopular package of spending cuts, and pushing through new structural reforms.

Syriza, which campaigned on a promise to renege on the bailout commitments, has ruled out cooperation with Samaras.

Speaking shortly after the result was announced, Samaras said Greeks voted to stay in the euro, foster growth and respect the country’s international commitments.

“This is a victory for all Europe,” he said. “I call upon all political parties who share these objectives to join forces and form a stable new government.”

Samaras repeated campaign promises to honor the country’s bailout pledges.

“We will work together with our partners in Europe in order to supplement the current policy mix with growth enhancement policies,” he said. “We are determined to do what it takes and do it fast.”

Greece’s broad-circulation Ta Nea daily said in an editorial Monday that party leaders _ including Syriza’s Alexis Tsipras _ must respect voters’ manifest desire for a coalition government.

“The country cannot waste a day,” the paper said. “It is clear from the arithmetic that after New Democracy’s victory a government can even be formed by two parties. But from a political viewpoint that will not suffice. All parties that say they believe in the country’s European future must actively prove their respect for the message of the elections.”

The United States welcomed Sunday’s result. “We hope this election will lead quickly to the formation of a new government that can make timely progress on the economic challenges facing the Greek people,” the White House said in a statement.

Power-sharing negotiations could be tough. Socialist PASOK leader Evangelos Venizelos, who spent months negotiating bailouts as Greece’s finance minister, has suggested dumping the usual procedure of each party seeking coalition partners. He proposed a four-party coalition between New Democracy, Syriza, PASOK and Democratic Left, which was in sixth place with 6.3 percent of the vote and 17 seats.

“There is not one day to lose. There is no room for party games. If we want Greece to really remain in the euro and get out of the crisis to the benefit of every Greek family, it must have a government tomorrow,” Venizelos said.

PASOK officials said Venizelos would insist on Syriza joining any future coalition, despite its anti-bailout stance _ although the move could simply be a negotiating tactic to convince the public that Syriza was unwilling to play a constructive role in pulling Greece out of its crisis.

Tsipras, a 37-year-old former student activist, has ruled out such a possibility.

Tsipras phoned Samaras on Sunday night to congratulate him on his victory and vowed that his party would remain outside the government.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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