Snap Election Risks Greek Lifeline; Nation's Stocks and Bonds Plunge on Government Defeat

By Eleni Chrepa and Paul Tugwell Dec 29, 2014 10:27 AM ET

Greece faces snap elections next month that risk severing the international lifeline that has supported the country since it sparked Europe’s sovereign debt crisis in 2010.

Prime Minister Antonis Samaras said in a live broadcast in Athens today that he will recommend parliamentary elections are held on Jan. 25, almost 18 months before his coalition’s term was due to end. Samaras spoke after he failed in his third attempt to persuade lawmakers to back his candidate for head of state, forcing the legislature’s dissolution.

“The government did everything possible to get a new president elected and a minority of MPs now drags the country to early elections,” Samaras said in remarks broadcast on state-run Nerit TV. “I will do everything to guarantee that the country stays on the path of reforms.”

Stocks and bonds plunged in Athens after the government defeat, recalling the height of the Greek financial crisis in 2012, with investors concerned a victory by the opposition Syriza party would jeopardize the terms of Greece’s rescue struck with international creditors. Syriza, which opposes austerity measures imposed in return for the outside aid, leads Samaras’s New Democracy movement in opinion polls.

Fear vs Anger

“These elections will be a struggle between fear for euro exit and anger against austerity,” George Pagoulatos, professor of European politics and economy at the Athens University of Economics and Business, said by phone. “The government will be emphasizing the risks associated with Syriza’s anti-bailout stance and Syriza will try to convince voters that it can offer a viable alternative, without endangering the country’s euro membership.”

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http://www.bloomberg.com/news/2014-12-29/greece-faces-snap-election-as-samaras-fails-to-install-president.html