Greeks Vote in Favor of Remaining in the Eurozone

Greek Acropolis

Greece has voted on Sunday to continue their bailout arrangements as the New Democracy emerged as winner of parliamentary election and the other pro-Euro parties scored enough to be able to form a government coalition. New Democracy came first with 29.6 percent and 129 seats in the parliament, while PASOK scored 12.3 percent and acquired 33 seats in the parliament. Anti-bailout Syriza scored 26.9 percent and 71 seats in the parliament, while extremist far-right Golden scored 6.9 percent and 18 seats in the parliament.

Confronted with the prospect of leaving the eurozone and return to the national currency, Greeks voted in favor of continuing the European arrangement, thus relieving the European leaders who were preparing for the worst. CBS News reports that an anti-bailout success would have had dramatic consequences for Greece, for other weak European economies and for the entire world.

The news about the outcome of Greek elections was hailed by the European leaders and caused on Monday the Asian markets to climb. In a statement, the leaders of the European Union said that they were convinced that a continued fiscal and structural reform of Greek economy could solve Greece’s economic problems.

The United States also saluted the election outcome in Greece, expressing confidence that a new government would be formed very soon and the reforms will pick up the pace.

New Democracy will attempt the first talks toward a new majority on Monday and will need at least 151 seats in the parliament on its side in order to form the government. The 300-seat parliament ascribes 50 seats as a bonus to the party that wins elections. The new scores could indicate that New Democracy and PASOK have enough for a new government to be formed.

PASOK leader Evangelos Venizelos said that the normal procedure of each party seeking coalition partners should be dumped and a coalition of four parties, which would include Syriza and the small Democratic Left, which came in the sixth place, be formed.

Analysts believe Venizelos only wants to show the people of Greece that Syriza is not committed to the wellbeing of the country by forcing it to say “no” to such a coalition, which Alexis Tsipras, the leader of the party, has already done.

Tsipras congratulated Antonis Samaras, leader of New Democracy, for his victory and vowed that he would remain outside the government. He said that his party would participate in the developments ahead from the position of the main opposition party.

Antonis Samaras on Sunday said that the Greeks were electing between euro and drachma, and promised to make a renegotiation of the harshest provisions of the bailout agreement, so that the population be spared the hardship of transition toward a functional economy.

The victory of New Democracy was interpreted by the German Finance Minister as a decision to “forge ahead” with implementing far-reaching reforms. Wolfgang Schaeuble said that it was important for Greece to remain in the path of reforms and to keep its promises to the creditors, but did not express on whether the European lenders would agree to prolong the terms offered to Greece.

German Foreign Minister for his part expressed confidence that the European Union and the International Monetary Fund would agree to offer Greece more time, as New Democracy already announced it would demand the renegotiation of some of the provisions.

The vote on Sunday comes after the standoff on May 6, when the three parties that came first, The New Democracy, Syriza and PASOK were unable to create a government, after many rounds of negotiations.

Syriza on that occasion announced that it would never ally with a party which signed the bailout agreement, which brought the population of the country unemployment, salary cuts and other austerity measures.

Alexis Tsipras announced that Syriza was in favor of continuing in the eurozone but that it would annul the bailout agreement and ask for a new deal, prompting the European leaders to say that such a stance would mean the exit of the country from the eurozone.

The president of the country, Karolos Papoulias, invited the leaders of the three parties and proposed them to create a national salvation government, which the three opposed; then a two-year government to carry out the agreement was brought into question, without too much support though.

At the end of negotiations, Papoulias had no alternative than to call for new elections and entrust the caretaker government to a judge at a high court, according to the Greek constitution.

Since the new elections were announced, the leaders of the European states sent messages to the Greek people, the most important of which was that the union wanted Greece as partner in the eurozone, but that it was up to the voters to determine whether this would come to pass.

Economic analysts believe that the situation of Greece is still not clear on whether the country will be able to continue in the eurozone or will have to leave so that it may not bring the rest of the eurozone countries down.11