The results from Greece’s elections on Sunday were set to decide whether or not the country would stay in the euro, with many world leaders predicting a Greek exit from the currency could spread contagion to other eurozone members and deepen the turmoil in the global economy.
As it happens, their fears have now been allayed. After inconclusive elections in May had forced a revote, this time there was a solid result: a narrow victory for the broadly pro-bailout New Democracy party. New Democracy’s triumph means Greece will keep the euro … and the austerity programme that is so deeply unpopular with many Greek people.
With 99.9% of ballots counted, interior ministry results put the New Democracy party on 29.7% of the vote (129 seats), Syriza on 26.9% (71) and the socialist Pasok on 12.3% (33). Relieved world leaders are now urging Athens to form a cabinet quickly.
The tough austerity measures faced by the Greek populace are a condition of the two international bailouts awarded to the country in the last two years. The initial package was worth 110bn euros ($138bn) in 2010, while the follow-up last year came to 130bn euros.
European markets have reacted positively to the election results, rising in early trading. New Democracy leader Antonis Samaras (pictured above) said Greeks had chosen to stick by the euro, and then called for a “national salvation government.”
Now the Greeks have voted in a pro-bailout party, does this mean its creditors will view it more sympathetically. That seems unlikely, with German Foreign Minister Guido Westerwelle saying that the core of the Greek reform bailout programme is non-negotiable. However, he added some flexibility might now exist over the timing of austerity-related reforms.
Alexis Tsipras, leader of the strongly anti-austerity runer-up party Syriza, said his party would not take part in the government, and would continue to protest the austerity measures in opposition.