Greece's New Democracy party garnered a victory in a critical election on Sunday and will now look to forge a coalition government that will comply with deep austerity measures international lenders demand in exchange for much-needed bailout funds.
Projections from Greece’s Interior Ministry suggest the New Democracy party combined with the PASOK party may be able to secure a majority in Parliament together. Both parties have broadly supported the painful austerity measures that the European Union and International Monetary Fund have pushed for in return for the rescue. On the other side of the spectrum, the Syriza party has vowed to renegotiate the terms of the rescue, something that Germany, Europe's paymaster, has repeatedly said it would refuse to do.
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New Democracy was seen scooping up 128 seats, while PASOK snags 33 seats. Syriza is projected to get 72 seats. For a party to secure a majority, it would have to get 151 of 300 seats in the country's Parliament. If a majority is not secured, leaders of each political party, starting with the one that has the most votes, will have three-day periods to try to form a unity government.
The stakes were high for Greece, which needs international support to avoid defaulting on its debt and potentially being forced out of the 17-member eurozone currency bloc. Indeed, there had been concerns for weeks that if the rescue was ultimately rejected, it could imperil bigger countries, like Spain or Italy. The euro advanced 0.59% to $1.2730 in early Australian trade amid optimism Greece would stay in the euro, according to data from Reuters. Most major markets were still closed as the results began trickling in.
Antonis Samaras, the head of the New Democracy party, said he will work to form a coalition government that backs the rescue.
"Today the Greek people have expressed their will to stay anchored with the euro," he said in a news conference on Sunday, according to a report by The Wall Street Journal. "We will respect our signature and the country's obligations."
The Eurogroup, which represents the eurozone finance ministers, was quick to call for the swift formation of a new government and to reaffirm their backing for the $219 billion bailout. It also said it expects the so-called troika to start discussions once the new government is formed to "exchange views with the new government on the way forward and prepare the first review under the second adjustment programme."
Elections in May failed to yield a majority, and then subsequent attempts to forge a government fell through, leading to these elections.