World powers raised the pressure on Greece to form a government quickly, as coalition talks loomed Monday after parties backing an EU-IMF bailout won an election that eased fears of a eurozone exit.
The European Union and the United States said Greece now had to enact key reforms after its second general election in two months handed victory to the conservative New Democracy party, which has pledged to keep Greece in the euro.
New Democracy leader Antonis Samaras, a Harvard-educated former foreign minister, said after Sunday’s win: ‘The country does not have a minute to lose.’
‘We ask all political forces which share the aim of keeping the country in the euro... to join a government of national unity,’ he said.
The third-placed socialist Pasok party has said it is ready to join a coalition with New Democracy but wants other leftist forces to be included in a government of ‘national responsibility’ with a broad mandate for reforms.
Relieved Asian markets surged on the news with Tokyo closing up 1.77 per cent and Hong Kong climbing 1.55 per cent. The euro also rose sharply to $1.2720 compared to $1.2644 late on Friday.
The anti-austerity leftist Syriza party and its firebrand leader Alexis Tsipras came second and has ruled out joining a coalition, arguing that the harsh conditions for the bailout deal should be scrapped altogether.
With almost all the votes counted, New Democracy controlled 129 seats in the 300-seat parliament, Syriza 71 and Pasok 33. The neo-Nazi Golden Dawn party which capitalised on anti-immigrant fears also won 18 seats.
The elections were being seen as an important milestone in the austerity or growth debate in Europe, with extra significance in Greece where the sovereign debt crisis started in 2009 setting off a chain reaction across Europe.
‘A further lapse into the unknown was avoided’ with the New Democracy victory, said Unicredit economist Erik F. Nielsen. But he warned that the past ‘six weeks since the last election have seen an already very weak economy grind to a halt’ and there is ‘much to be done’.
Japan and Australia joined in EU and US calls for Greece to form a new cabinet quickly.
International Monetary Fund chief Christine Lagarde added to the sense of urgency ahead of the vote saying consultations should start as early as this week as there was uncertainty about exactly what reforms Greece had implemented.