Greek Election Gridlock Raises Risk for Bailout

Greece’s political leaders struggled
to find the support needed to form a coalition government after
voters flocked to anti-bailout parties, calling into question
the country’s ability to impose the measures needed to guarantee
its future in the euro.

New Democracy won 20 percent of the total vote with more
than 50 percent of the ballots from yesterday’s elections
counted at 12:30 a.m., according to the Interior Ministry
website. Socialist Pasok, which partnered with New Democracy in
securing a second rescue package for the country, trailed in
third place with 42 seats. Official projections predicted the
two would fall one short of the 151 seats needed to win a
majority.

Syriza, a coalition of left parties which has vowed to
cancel the bailout terms, got 16.1 percent and has 49 seats as
the second-biggest party, boosting its showing from the 2009
election nearly four-fold. The new Greek parliament will have
three new anti-bailout parties represented.

“The chance of a pro-EU bailout coalition of New Democracy
and Pasok is on a knife-edge,” Sarah Hewin, senior economist at
Standard Chartered Plc, said in an e-mail. “The scale of
opposition is such that even if a pro-bailout coalition can be
formed it will be tough for the new government to push ahead
with further austerity, risking a halt to EU bailout finance.
This test could come within weeks.”

EU Voter Anger

As voters across Europe punish governments for failing to
control a debt crisis triggered by Greece, New Democracy leader
Antonis Samaras said he’d try to put together a government of
“national salvation” that will keep the country in the euro
area, a plan echoed by Pasok leader Evangelos Venizelos.

“I asked for a strong mandate,” Samaras said in
statements in Athens yesterday. “The people decided
otherwise.”

As leader of the biggest party, Samaras is due to receive a
three-day mandate today to try and form a government. That
mandate will pass to the head of Syriza and then to Venizelos if
efforts fail. After those nine days, President Karolos Papoulias
will call all parliamentary leaders together to see if a
government can be

You can read the rest of this article at:: http://www.businessweek.com/news/2012-05-06/greek-election-gridlock-raises-risk-for-bailout-euro-future

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Posted by RobertButler on May 6 2012. Filed under 2012 Presidential Campaign. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry