France and Greece Choose Socialism

AFP - Greece's two main pro-austerity parties suffered major losses in elections Sunday, exit polls showed, throwing into doubt the eurozone country's commitment to meeting the tough terms of its two bailouts.

The conservative New Democracy led by Antonis Samaras was the largest party with 17-20 percent of the vote, insufficient to give it an absolute majority and down from 33.5 percent at the last election in 2009, the exit polls showed.

The left-wing Pasok saw its score slump to 14-17 percent from 43.9 percent. The party was even leapfrogged into second place by the leftist Syriza party, which scored 15.5-18.5 percent, up from 4.6 percent three years ago.

A neo-Nazi party, Golden Dawn, was also set to enter parliament for the first time in nearly 40 years, notching up 6-8 percent. The communist KKE scored 7.5-9.5 percent, compared to 7.5 percent in 2009, the exit polls showed.

Both Pasok and ND have said they want the "troika" of the European Union, International Monetary Fund and European Central Bank to cut Greece more slack in their two bailout deals worth worth 240 billion euros ($314.0 billion).

But with voters angry at the austerity cuts demanded in response, many of the smaller parties, including Syriza, want to tear up the agreements, while the communist KKE party want to leave the eurozone.
The result therefore will make it tough for Samaras, once he is tasked to do so by the president, to form a government able to keep its austerity promises and implement more cuts demanded by the country's creditors.

His other options include a repeat of the current uneasy Pasok-ND alliance or fresh elections. The final results are not expected much before before 2000 GMT, and experts have warned they could differ considerably from the exit polls.

"After two years of barbarism, democracy is coming home," said Alexis Tsipras, the head of the leftist Syriza party said earlier Sunday after casting his vote. "The people will send a loud and clear message to all of Europe."

Pasok head Evangelos Venizelos, a former finance minister who helped negotiate Greece's second bailout earlier this year, was booed as he voted in his constituency in Thessaloniki, with one heckler shouting "thief".
Greece's creditors, not least paymaster-in-chief Germany, the main proponent of austerity before growth -- despite growing criticism across Europe -- have little appetite to loosen the bailout terms, let alone consider a third rescue.

With Athens having committed to finding in June another 11.5 billion euros in savings through 2014, any ambition to renegotiate terms "suggests a degree of liberty they do not have," Swiss bank UBS said in a research note.

In ominous comments widely quoted by Greek newspapers on Saturday, German Finance Minister Wolfgang Schaeuble said that if Greece's new government deviated from its commitments, the country would "bear the consequences."

"Membership of the European Union is voluntary," he said in Cologne.

As a result, it is Greece's vote rather than France's presidential election, also decided on Sunday, which "weighs heavier" on investors' minds, said Valerie Plagnol, Credit Suisse director of research.

Holger Schmieding, economist at Germany's Berenberg Bank, said that with a "high" chance that no stable government willing to implement more reforms can be formed, there was a 40-percent risk of a Greek eurozone exit this year.

Outgoing technocrat Prime Minister Lucas Papademos, head of an uneasy Pasok-ND coalition since November that negotiated the second bailout, said as he voted in Athens that he expected a new government to be formed "this week."

"We are all agreed that these elections are most crucial. Everyone has to make a decision, not just on who will govern but on what path the country will take in the coming decades," the former ECB vice president said.

With Portugal and Ireland also getting aid and Italy and Spain on shaky ground too, last year there were worries of some sort of break-up of the eurozone. These fears have subsided in recent months but have not completely disappeared.

Greece has already written off a third of its debts and is in its fifth year of recession. One in five workers is unemployed, its banks are in a precarious position and pensions and salaries have been slashed by up to 40 percent.