Greece election: Coalition talks begin after victory for conservatives

GREEK conservative leader Antonis Samaras is to hold talks aimed at forming a coalition after coming first in national elections which followed weeks of uncertainty over the debt-crippled country’s future in the single European currency.

• Antonis Samaras begins coalition talks

• New Democracy win Greek election with 29 per cent of vote

• Vow to secure Greece’s place in the Eurozone

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

With 99.9 per cent of the vote counted today, New Democracy had 29.66 per cent of the vote, followed by the Syriza radical left coalition at 26.89 per cent.

The conservatives have pledged to respect the austerity pledges Greece made to secure its vital international bailouts.

Syriza, which has ruled out co-operation with Mr Samaras, campaigned on a promise to renege on the commitment for further austerity and reforms, without which the rescue loans would stop.

Greeting joyous supporters last night, Mr Samaras said: “I am relieved for Greece and Europe. As soon as possible we will form a government.”

Mr Samaras said that the country would honour its commitments to its eurozone partners.

“The Greek people voted today to stay on the European course and remain in the eurozone,” he said. “There will be no more adventures, Greece’s place in Europe will not be put in doubt.”

Syriza leader Alexis Tsipras, a 37-year-old former communist, called Mr Samaras to concede defeat.

Markets reacted favourably to the result, with London’s FTSE 100 index jumped by as much as 1.4 per cent in early trading. The euro hit a three-week high against the US dollar, rising to around $1.2730 in early Australasian Monday trade, from around $1.2655 late in New York on Friday.

New Democracy and Pasok have both expressed a willingness to work with other European nations to stay in the 17-nation eurozone.

A coalition would need at least 151 seats to form a majority government.

Eurozone governments last night said they had held “intense” discussions on the situation in Greece.

French finance minister Pierre Moscovici said: “There were intense consultations this afternoon and there will very rapidly be a statement, which will say how we want to broach the situation in Greece,”

The election was the second in six weeks, called after a 6 May vote proved inconclusive. On that occasion, each of the main parties tried but failed to form a coalition government.

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 spiralling to above 22 per cent and tens of thousands of businesses shutting down.

Mr Samaras cast yesterday’s choice as one between the euro and returning to the drachma. He has vowed to renegotiate some of the bail-out’s harsher terms but insists the top priority is for the country to remain in the eurozone.

He said: “Tomorrow a new era for Greece begins.”

Earlier yesterday, around ten 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 neighbourhood of Exarhia, a traditional haven for leftists and anarchists.

Greek police were also investigating the discovery yesterday of two unexploded hand grenades outside the 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.

Last night Germany’s foreign minister said it was important for a new Greek government to stick to the country’s agreements with international creditors. However, he signalled that Athens may be given more time to comply with them after weeks of pre-election standstill.

Germany – Europe’s biggest economy – has been a major contributor to Greece’s two multibillion-euro rescue packages and a key advocate of demanding those conditions.

German foreign minister Guido Westerwelle said last night: “We want Greece to stay in the euro; we want Greece to continue wanting to belong to Europe. But Greece will decide now on its own path; you cannot stop anyone who wants to go.”

A Greek exit could cause economic chaos in Europe, prompt investors to flee stocks in the US, 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 US.