Surprise Greek coalition set for debt battle

Supporters of Alexis Tsipras, leader of the left-wing Syriza party, cheer during a rally outside Athens University. Picture: Getty Images

It marked the beginning of a battle with Europe to cut back Greece’s debts, which, if it fails, could see the country removed from the eurozone.

International ratings agency Standard and Poor’s suggested it could downgrade Greece outwith its usual timetable if things “go badly”.

In a secular ceremony, Mr Tsipras, 40, said he would give his all “to protect the interests of the Greek people”, then signed a book with the traditional pen used by all Greek leaders.

Mr Tsipras, who was not wearing a tie – something he says he will not do until Greece has a debt reduction deal – then laid a wreath at a memorial in Kaisariani, an Athens suburb where hundreds of Communist resistance fighters were executed by the Germans on 1 May, 1944.

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The gesture was regarded by many as a symbolic gesture both to the Nazi-sympathetic Golden Dawn party and to Germany, which is expected to put up a strong stance against his economic demands.

He was later due to return to Maximos Mansion, the official prime ministerial residence, to prepare for his vote of confidence. However, in a break with tradition, the property was not handed over to him by outgoing premier Antonis Samaras, whose party was beaten by Syriza. He and Mr Tsipras have been at loggerheads over austerity cuts for the past 12 months.

The new PM found the backing needed to form a government after coming to an agreement with the small Independent Greeks party – to which it is ideologically opposed in almost every aspect, save its opposition to the bailout.

His left-wing party, which has pledge to “erase” Greece’s debt, won 149 seats on Sunday, two short of the number needed to form a majority government.

The coalition announcement boosted stock markets across Europe, that had fallen amid fear of a second election. Stocks had dropped as much as 4 per cent in Athens yesterday morning, before recovering.

•Anti-austerity Syriza heads for Greek election win

Greek voters swung to the once-marginal, left-wing party after five years of punishing austerity measures demanded under euro bailout deals that threw hundreds of thousands of people out of work and left nearly a third of the country without state health insurance.

Thousands saw Mr Tsipras speak in Athens after his opponents conceded. “The Greek people have written history,” he said. “Greece is leaving behind catastrophic austerity, fear and autocratic government.”

At Syriza’s campaign tent in central Athens, supporters hugged and danced in celebration. “It’s like we’ve been born again and finally feel some hope,” Litsa Zarkada, a fired government cleaner, said.