Winner of Greek elections moves to form government that will embrace bailout
ATHENS – The winner of the Greek elections moved on Monday to build a governing coalition for this fractured state, as rising Spanish interest rates offered a stark reminder that the worst may still not be over for the euro zone.
Antonis Samaras, whose New Democracy party garnered about 30 percent of the vote in Sunday’s parliamentary ballot, was urged by President Karolos Papoulias to form a government quickly to respond to the country’s economic crisis and start to repair frayed relations with international bailout lenders.
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Greece’s conservative New Democracy Party won enough votes in the country’s parliamentary election Sunday to form a governing coalition. In Greece, the results indicate that voters want to stay in the euro zone. Around the world, the news boosted international markets.
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“The country cannot stay not even one hour without a government,” Papoulias said after presenting Samaras with a mandate that will give him several days to form a new coalition. Samaras was given a similar mandate after a May 6 vote, but the outcome of that election was so divided neither he or other top finishers were able to form a government.
Final results in this round of voting gave Samaras’ party 129 seats in the Greece’s 300-person assembly. A possible alliance with the Panhellenic Socialist Movement would be enough to form a majority, and talks were expected to proceed Monday afternoon.
The two parties are rivals, but both have endorsed the bailout package that is keeping Greece afloat, with hundreds of billions of dollars in international loans given in return for a strict set of budget cuts and other economic steps.
The second-place Syriza party, which opposes the bailout terms and had threatened to tear up the agreement and possibly lead Greece away from the euro zone, has said it will not join the government.
A decision by Greece to leave the currency union could set off dangerous ripple effects with investors suspecting that other struggling European countries, such as Italy and Spain, also might not be able to meet their obligations. The result could have been a series of domino-like exits from the euro zone, ultimately causing the disbanding of the currency union and economic chaos.
Instead, the election outcome initially boosted European stocks, and prompted conciliatory statements from European leaders indicating they may be willing to ease some of the terms of the bailout package, given pledges by Samaras to control government deficits and restructure the economy.
In a short victory speech, Samaras called the outcome a “victory for all Europe.”
“Today the Greek people expressed the will to stay anchored within Europe, honor their commitments and foster growth,” Samaras said. He called on the other parties to “join forces to form a stable government. . . . There’s no time to lose.”
But the risks still facing the euro zone became quickly apparent as the interest rate on Spanish bonds traded in the secondary market breached 7 percent. That level has proven to be a red line for smaller nations, including Greece, who sought international help after reaching it.
Spain’s larger economy may not be as quickly susceptible, but the jump in borrowing costs reflected the major decisions still facing the euro zone as a whole: how to strengthen the region’s banks, restart economic growth, and convince investors that the currency union is durable. continues page 2
