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Syriza could win outright majority as Greece rejects austerity

Greece's leftwing Syriza appeared on course to trounce the ruling conservatives in Sunday's snap election and could win the absolute majority it wants to fight international creditors' insistence on painful austerity measures.

Syriza was on course to win between 149-151 seats in the 300 seat parliament, with 36.5 percent of the vote, almost nine points ahead of the conservative New Democracy party of Prime Minister Antonis Samaras, according to interior ministry projections, based on a partial count of the vote.

While a final result may not come for hours, 40-year-old Syriza leader Alexis Tsipras was set to become prime minister of the first euro zone government openly opposed to bailout conditions imposed by European Union and International Monetary Fund during the economic crisis.

His expected victory raises the prospect of an immediate standoff with German Chancellor Angela Merkel's government and could raise questions over distribution of the next tranche of more than 7 billion euros in outstanding international aid Greece needs in the next few months.

Tsipras' campaign slogan "Hope is coming!" resonated with voters, weary of austerity after six years of constant crisis that has sent unemployment over 25 percent and threatened millions with poverty.

"The vote is a 'No' to unilateral austerity, a 'No' to a Europe that they tried to turn into Merkel's punching bag," Syriza senior official Dimitris Papadimoulis said on Greece's Mega television.

With flag-waving supporters hitting the streets of Athens, some shedding tears of joy, Germany's Bundesbank warned Greece it needed to reform to tackle its economic problems and the euro fell nearly half a U.S. cent.

A Syriza spokesman said Samaras had called Tsipras to congratulate him on winning the vote.

A total of seven parties are set to enter parliament, including the far-right Golden Dawn, but the final result will depend heavily on votes still to be counted in Athens, which accounts for slightly under half of Greece's 11 million population.

Tsipras has promised to keep Greece in the euro and has toned down some of the fiery rhetoric for which he was known but his arrival in power would herald the biggest challenge to the approach so far adopted to the crisis by euro zone governments.

Financial markets have been worried a Syriza victory will trigger a new financial crisis in Greece, but the repercussions for the euro zone are expected to be far smaller than feared the last time Greeks went to the polls in 2012.

If Syriza ends up short of an absolute majority, Tsipras will have to try to form a coalition with smaller parties or reach an agreement that would allow Syriza to form a minority government with ad-hoc support from others in parliament.

Michalis Kariotoglou, an official from the pollsters that processed the results for the interior ministry, said the election had produced a "thriller".

A number of parties could fit as potential partners, including the centrist To Potami or the anti-bailout Independent Greeks. However if it requires support to govern, it may find itself hostage to its partners' demands, raising questions over how durable a Syriza government would prove.

Standoff with Berlin

Coming after the European Central Bank's move to pump billions into the bloc's flagging economy, Sunday's result will stir consternation in Berlin, which insists the bailout deal must be respected.

Asked about the reminder of the need for reform from Bundesbank President Jens Weidmann, Syriza spokesman Panos Skourletis told Greek television: "It confirms the negotiations have already started."

Tsipras has promised to renegotiate a deal with the European Commission, European Central Bank and International Monetary Fund "troika" and write off much of Greece's 320 billion-euro debt, which at more than 175 percent of gross domestic product, is the world's second highest after Japan.

At the same time, he wants to roll back many of the harsh austerity measures demanded by the "troika", raising the minimum wage, lowering power prices for poor families, cutting property taxes and reverse pension and public sector pay cuts.

U.S. investment bank J.P. Morgan said the result could weigh on markets but that it considered speculation over a possible Greek exit from the euro was "a stretch" and a negotiated deal appeared the most likely outcome.

It added: "our base case remains that a Syriza government or Syriza-dominated coalition would alter its platform to retain troika financing."

Syriza officials have said they would seek a six-month "truce" putting the bailout programme due to end on Feb. 28 on hold while talks with creditors begin.

Greece, unable to tap the markets because of sky-high borrowing costs, has enough cash to meet its immediate funding needs for the next couple of months but it faces around 10 billion euros of debt repayments over the summer.

Without fresh cash, it will be unable to meet the payments, raising the spectre of an exit from the euro.

[Source: By George Georgiopoulos and Lefteris Karagiannopoulos, Reuters, Athens, 25Jan15]

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small logoThis document has been published on 26Jan15 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.