Greek Projection Casts Doubt on New Democracy, Pasok Government

Greek voters flocked to anti-bailout parties, projections showed, throwing doubt on whether the two main parties can put together a government strong enough to implement spending cuts to ensure the flow of bailout funds.

New Democracy led in the election today with 18.9 percent of the vote, according to projections based on partially counted ballots on state-run NET TV. Pro-bailout socialist Pasok got 13.4 percent. On the other side of the debate, anti-bailout party Syriza got 16.6 percent and Independent Greeks got 10.5 percent. Based on those figures, Pasok and New Democracy would fall one short of the 151 seats needed to win a majority.

“Greece needed this election like it needed a hole in the head,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said in an e-mailed note. “There’s no political consensus for the kind of reforms that Greece must implement if it wants to remain in the euro zone.”

As voters across Europe punish governments for failing to control a debt crisis triggered by Greece, New Democracy leader Antonis Samaras said he wants to put together a coalition government that will keep the country in the euro area.

“The fact that New Democracy came in first increases the responsibility,” Samaras said in remarks on NET TV. “We decided to take over an initiative to form a coalition government on two main pillars: the country remaining within the euro and the change of the economic policies of the bailout.”

Euro Falls

The euro dropped to a three-week low against the dollar after elections in Greece and France where Socialist candidate Francois Hollande defeated Nicolas Sarkozy in the presidential election. The 17-nation shared currency traded at $1.3047 at 8:11 p.m. London time, from $1.3084 on May 4.

The Communist Party won 8.5 percent, according to the latest projections, and will get 22 seats. Anti-immigrant Golden Dawn got 7 percent of the vote, entering Parliament for the first time.

As projections fluctuated, the head of Syriza said voters had given him a mandate to renege on bailout agreements negotiated with the European Union and the International Monetary Fund.

Greeks want “to cancel the memorandum of barbarity,” Alexis Tsipras said in statements televised in Athens on NET TV. He said he would begin talks with parties of the Greek left tomorrow to achieve that goal. The head of the Communist Party, Aleka Papariga, said she won’t team up with Syriza.

More Cuts Needed

Greece must continue spending cuts to keep disbursements flowing from the EU and the IMF and failure to do that may determine whether the country has a future in the euro area.

New Democracy and Pasok, which have alternated in power since 1974, were partners in the outgoing caretaker government of Prime Minister Lucas Papademos, which secured a second rescue package earlier this year, saving Greece from financial collapse.

Under the terms of that 130 billion-euro package, which was accompanied by the biggest debt restructuring ever, international lenders expect to hear in June how Greece will achieve 11.6 billion euros of savings for 2013 and 2014.

The vote projection today said at least seven and as many as 10 parties may enter Parliament, underscoring fatigue over austerity and frustration with the politicians responsible for implementing it. Unemployment is almost 22 percent and for those under the age of 24 it’s almost 51 percent.

A total of 9.85 million Greeks, including 360,000 new voters, were eligible to cast ballots today.