Greek elections shake up Parliament

By Anthee Carassava, Los Angeles Times

May 6, 2012 12 AM PT

ATHENS — Greek conservatives won at the polls Sunday in national elections but fell far short of enough seats to take power, deadlocking Parliament and deepening unease over the country’s economic future and its continued membership in the Eurozone.

With 72% of the votes counted, Antonis Samaras and his center-right New Democracy party had 19.7% of the vote, giving them 111 seats — far short of the number needed to secure an outright majority inGreece’s300-seat Parliament. Samaras, 61, has three days to try to form a coalition before passing on the task to the runner-up party.

With the Parliament split among at least seven parties — many of them formed in protest of austerity cuts that have crippled the economy — the messy electoral result could take weeks to untangle at a time when Europe’s debt crisis threatens to flare up again. It’s the most fractured legislature in Greece since the restoration of democracy in 1974.

“This is a seismic political shift,” said Dimitris Mavros, managing director of the MRB polling group, adding: “We’re looking at the end of a political era in which the conservatives and Socialists dominated the political spectrum. Voter intent [was] clear: to demolish that system and produce a new, highly fragmented political kaleidoscope.”

The uncertainty could spook investors who are left to wonder whether Greece will stick to the terms of two international bailouts that have enabled the country to avoid default but have plunged the economy into a deep recession through multiple rounds of harsh spending cuts.

Samaras has vowed to try to renegotiate elements of the rescue packages, while most of the fringe parties that made gains in Sunday’s vote reject the bailout terms entirely.

Those anti-austerity groups include the radical leftist Syriza party, which unseated scores of Socialist and conservative backbenchers and came in a surprising second with 16.3% and 50 seats. The far-right Golden Dawn party, which has sparked widespread concern with its anti-immigrant stand and thuggish tactics, won 6.9% and 21 seats.

“Athens will have to show that it wants to make the effort to stay in the Eurozone,” said Daniel Gros, director of the Center for European Policy Studies in Brussels, referring to the 17 nations that use the euro currency. “If it doesn’t, then that could spark contagion” of Europe’s debt crisis to larger nations such as Italy and Spain.

The Socialists emerged as the big loser Sunday. Under a pugnacious new leader, former Finance Minister Evangelos Venizelos, the party managed to gain 42 seats with just 13.6% of the vote, down a stunning 30 percentage points from its landslide victory in 2009.

Both Samaras and Venizelos were visibly distraught over the poor performance of their respective parties, once the dominant forces in Greek politics.

By contrast, Alexis Tsipras, the savvy, charismatic 37-year-old who heads the new leftist Syriza party, flashed a victory sign to supporters. He billed his victory a “peaceful revolution” and warned German Chancellor Angela Merkel that “her fiscal-austerity policy has been defeated.”

For Samaras, stitching together a coalition will be a tricky proposition.

For example, he has already said that he would rather force another election than form a government with Venizelos, his archrival. And even if their once-mighty parties did succeed in forming an alliance with the help of a third, smaller party, it would probably be short-lived, pundits and politicians here said.

“We have a Plan B, C and D,” a senior advisor to Samaras said, speaking on condition of anonymity. “We have to wait and see how the final chips are going to fall.”

Whatever the outcome, the new government will face a tough task. By June, Athens will have to detail about $14 billion in added cuts to cover budget gaps through 2014. Last week, Europe’s paymaster, Germany, warned Athens that any failure to meet its signed commitments would carry serious consequences.

Locked out of international markets, Greece has relied almost exclusively on foreign credit since its European peers and the International Monetary Fund cast Athens its first lifeline of about $150 billion in May 2010. A deepening recession and the need for a second, $170-billion bailout, plus a massive debt-restructuring deal, forced the Socialists and New Democracy into a fractious coalition in November.

Greeks have watched their living standards plunge. The unemployment rate has now soared past 21% — a rate comparable to the United States at the height of the Great Depression — and public services, including healthcare, have collapsed.

“Our suffering has to end,” Athina Pougiouda, a conservative turned Syriza supporter, said after casting her ballot in central Athens. “Greece has to stand its ground. It has to regain its dignity.”

Carassava is a special correspondent. Times staff writer Henry Chu in London contributed to this report.