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Greece To Stay In The Euro

The latest news reports that we have seen this morning indicate the conservative party that backs keeping Greece in the eurozone has won the country’s election and immediately proposed forming a pro-euro coalition government.

The development eases, at least briefly, deep fears that the election would unleash an economic tsunami.

As central banks stood ready to intervene in case of financial turmoil, Greece held its second election in six weeks after an inconclusive ballot on May 6.

The vote was seen as crucial since it could determine whether Greece would leave the joint euro currency, a move that would have potentially catastrophic consequences for other ailing European nations and the entire global economy.

With 66 per cent of the vote counted, official results showed the conservative New Democracy winning 30.1 per cent of the vote and 130 of the 300 seats in parliament.

The radical anti-bailout Syriza party had 26.5 per cent and 70 seats and the pro-bailout Socialist Pasok party came in third with 12.6 per cent of the vote and 34 seats.

The parties have starkly different views about what to do about the 240 billion euros ($304 billion) in bailout loans that Greece has been given by international lenders, and the harsh austerity measures that previous Greek governments had to accept to get the funds.

Syriza chief Alexis Tsipras, who had tapped into a vein of deep anger over the plunging living standards faced by many Greeks, had wanted to rip up Greece’s international bailout deals and roll back the new taxes, job cuts and pension cuts imposed in the past two years.

Tsipras congratulated Samaras and conceded the election.

The head of Greece’s socialist Pasok party proposed that a unity government be formed of four top parties, including Syriza despite its anti-bailout views.

Pasok’s Evangelos Venizelos, who spent months negotiating bailouts as Greece’s finance minister, suggested dumping the usual procedure of each party seeking coalition partners. He said a government must be formed quickly and suggested one between New Democracy, Syriza, Pasok and the small Democratic Left.

“There is not one day to lose. There is no room for party games. If we want Greece to really remain in the euro and get out of the crisis to the benefit of every Greek government, it must have a government tomorrow,” Venizelos said after results were announced.

Sunday’s vote went smoothly except for one incident in which 10 men armed with sledgehammers and wooden bats attacked a polling station in central Athens, wounding two policemen and setting fire to the ballot box. The attack took place in the Athens neighbourhood of Exarhia, a traditional haven for anarchists.

Greek police were also investigating the discovery of two unexploded hand grenades outside private Skai television station on the outskirts of Athens.

AP, Reuters


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