ATHENS – Greece’s Socialist Party (Pasok) won yesterday’s election with enough seats to form a government and oust conservatives who angered voters for failing to tackle graft and the economy, an official projection said.
If the final result matches the projection, Pasok will win an absolute majority in parliament at a time when the Mediterranean country, seen as the euro zone’s weakest link, needs a strong government to deal with an economy on the verge of recession.
With about 20 per cent of the vote counted, Pasok had won about 43 per cent of the vote and the ruling New Democracy trailed with 36 per cent.
The interior ministry projected that Pasok had won nearly 44 per cent of the vote, giving it 160 out of 300 seats in parliament, and New Democracy was trailing with about 34 per cent and 92 seats.
“It is a great victory, a historic victory that means we have a great responsibility to meet the expectations of the Greek people,” senior Pasok party member Evangelos Venizelos said.
Thousands of jubilant Pasok supporters waited for party leader George Papandreou to appear at headquarters in central Athens, waving green flags and honking car horns.
Mr Papandreou promised a €3 billion stimulus package on a platform of taxing the rich and helping the poor, while outgoing prime minister Costas Karamanlis called for two years of austerity.
Markets are likely to be pleased with the result. “Not because they have a preference between the two parties, but because a new government with a parliamentary majority will have a fresh mandate to pursue its programme over a four-year term,” said Alexander Moraitakis, president of the Greek brokers’ association SMEHA.
It was the third face-off between Mr Papandreou (57), a US-born, soft-spoken politician, and Mr Karamanlis (53), a powerful speaker who appeals to the average Greek. Both are heirs to two of Greece’s most powerful political dynasties.
Opinion polls had shown most Greeks appeared ready to end five years of conservative rule that started amid high hopes of ending endemic corruption but soon sank amid scandal. Weakened by the scandals and a fragile parliamentary majority, Mr Karamanlis called the snap poll, gambling he had a better chance of winning now than later in his term.
Mr Papandreou will face a budget deficit topping 6 per cent of GDP, rising unemployment and deep unhappiness with the education system, social security and immigration.
“The main challenge for the new government is to submit a credible budget and a realistic timetable for reducing fiscal imbalances,” said Nikos Magginas, an economist at National Bank.
After years of robust growth, Greece’s output, about 2.5 per cent of the euro zone’s total economy, is set to slow to zero growth or even enter negative territory this year, with key drivers like tourism particularly hard-hit.
Economists question the wisdom of Mr Papandreou’s spending plan, saying it may lead to more borrowing in a country which already has the euro zone’s second biggest debt after Italy as a percentage of GDP. – (Reuters)