Greece rushes to form government after election

The Harvard-educated conservative leader Antonis Samaras won the election with his New Democracy party and held coalition talks after President Carolos Papoulias urged parties that a deal on Monday was “a categorical imperative”.

“The country cannot remain ungoverned for even an hour,” Papoulias said. The 61-year-old Samaras, a former foreign minister, said: “A national agreement is an imperative … We need to resolve the question immediately.”

Samaras met with the leader of the socialist Pasok party Evangelos Venizelos – his most likely coalition partner – and was expected to see the head of the small Democratic Left party, another possible ally, at 1730 GMT.

New Democracy won 129 of the 300 parliamentary seats in Sunday’s vote, the radical leftist Syriza party won 71 seats, Pasok 33, Independent Greeks 20, the neo-Nazi Golden Dawn 18, Democratic Left 17 and the Communist Party 12.

Pasok has called for other leftist parties to be included in any coalition and some Pasok cadres reportedly want to refuse the invitation, but socialist former prime minister Costas Simitis on Monday urged them to show bravery.

“Courage is called for, not fear,” said Simitis, who served two terms as prime minister in 1996-2004 and ushered Greece into the euro.

He said the three main parties seen as championing Greece’s European future – New Democracy, Pasok and the Democratic Left – “must cooperate or they will lead Greece to a eurozone exit and the drachma”.

Analyst Yiannis Loulis was downbeat about any new government’s chances. “It was mainly a vote of fear against the exit from the euro, not a real support of the reforms,” he said.

“The government will be fragile, with a fragile popular base, and I do not think it is going to last very long.”

Greece is under international pressure to set up a government quickly and respect an EU-IMF bailout that has enforced unpopular austerity, helping radical leftists win more than a quarter of the vote in Sunday’s election.

Syriza has ruled out joining any coalition but promises to be a powerful force in Greek politics for the future, with its firebrand leader Alexis Tsipras vowing on Monday that he would “keep the government in check”. Samaras has promised to respect Greece’s international engagements but also said on Monday that there should be amendments to the harsh conditions of the bailout deal “so the Greek people can escape from today’s torturous reality”.

Key player Germany has said there could be an extension of a deficit cutting deadline but New Democracy’s campaign promises appear to go further, including a reduction in property and sales taxes and a freeze in pension and salary cuts.

“Elections cannot call into question the commitments Greece made. We cannot compromise on the reform steps we agreed on,” German Chancellor Angela Merkel warned in the Mexican resort of Los Cabos just ahead of the G20 summit.

Greece has been forced to seek bailouts twice after hiding the extent of its debt woes, first for €110-billion in 2010 and then for €130-billion this year. It has also been given a €107-billion private debt write-off.

The eurozone is hoping the result can draw a line under a lengthy period of uncertainty that has unsettled markets.

World markets initially rallied after the result and the euro rose against the dollar but those gains quickly petered out. In foreign exchange deals on Monday, the euro was just up, at $1.2648 from $1.2644 late on Friday in New York.

The Athens stock exchange hit 7% before closing 3.64% higher at 580.67 points.

Sunday’s election was the most critical for Greece since the end of military rule in 1974 and was particularly significant for Europe as Greece is where the debt crisis kicked off in 2009 before spreading across the continent.

Any new government in Greece faces daunting economic challenges in a country where unemployment is at 22.6%, and a tricky political balancing act between pressure from the streets and from the global financial community.

“This should be a new beginning. It should be a new beginning on how the bailout programme should be put together,” said Spiros Rizopoulos, a political commentator and head of Spin Communications agency in Athens.

“I don’t want to get stuck in something that I am going to have to be paying off for the rest of my life as I starve just for the sake of having the euro.

“We need a development plan that is going to help us to create wealth to pay off with respect and dignity the money we owe,” he said. – AFP

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Dario Thuburn
Dario Thuburn
Scribbler for AFP news agency

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