07 May 2012

Reuters: Greece enters dangerous turmoil after election

Greece plunged into turmoil after an election which rejected a painful international bailout and left big questions over whether the country could avert bankruptcy and stay in the euro.

Amid uncertainty over whether a new government was possible, President Karolos Papoulias gave a three-day mandate to Antonis Samaras, leader of the conservative New Democracy party which won the biggest share of the vote in Sunday's poll.

Both New Democracy and Socialist PASOK were devastated by the election, in which Greeks angrily voted against the two traditional ruling parties who had imposed bitter economic hardship in exchange for a bailout to avert a sovereign default.

They do not have enough parliamentary seats to form a coalition on their own and will struggle to woo a raft of parties who gained in the poll by opposing the bailout.

Time is short for Greece which must give parliamentary approval next month for over €11 billion in extra spending cuts for 2013 and 2014 in exchange for more aid to stay afloat. Costas Panagopoulos, head of ALCO pollsters, said a highly unpredictable repeat election was the most likely scenario with the parties playing a blame game over the next 10 days before giving up. "I cannot see how they can form a coalition government", he said.

But another pollster, head of MRB group Dimitris Mavros, said the anti-bailout parties may not want another election because the outcome was so uncertain, and voters could swing back to traditional parties because of fears of being forced out of the euro.

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© Reuters