Greek Election Vote Leaves Euro in Balance

Greek Election Vote Leaves Euro in Balance

Posted By Stephen Cook

By Robert Winnett, Alex Spillius in Athens and Bruno Waterfield in Brussels, The Guardian – June 17, 2012

The fate of the euro was hanging in the balance after a rerun of the
Greek elections failed to produce a strong government with a mandate to
deliver the country’s austerity program.

Although the New Democracy party won the largest share of the vote,
it will have to rely on its discredited socialist rivals Pasok to form a
coalition government to accept the bail-out, keeping Greece in the
single currency.

Both parties, which have ruled Greece for 38 years, are widely blamed
for a crisis that has taken the country to the brink of economic
collapse. Between them they won only about 40 per cent of the vote. By
contrast, parties that opposed the bail-out increased their share of the
vote to over 46 per cent, with Syriza, the radical Leftist coalition
that wants to discard the agreement, almost winning outright.

Last night, Syriza insisted it would not join any kind of national
unity government and promised to provide strong opposition to any
pro-bail-out coalition.

Alexis Tsipras, the Syriza leader, said he would help the government
if it took measures to alleviate the burden on the people. “But it must
understand that austerity measures and the selling off of public wealth
cannot be imposed,” he said. “Anti-austerity is the only viable
solution.” Any New Democracy-led government will be under intense
pressure to renegotiate the terms of Greece’s bail-out to stave off
another political collapse and civil unrest.

Financial markets are expected to react to the tight election
results, with speculation mounting that Greece may yet be forced out of
the single currency. A weakened government will struggle to implement
the austerity measures demanded by its EU and IMF creditors.

Central banks across the world are thought to be ready to pump
billions of dollars, euros and pounds into the global economy today if
it becomes necessary….

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