Greek Elections-after vote ...[ 2847 ]

Greek conservatives begin hunt for partners after vote

By Karolina Tagaris and Dina Kyriakidou | Reuters – 1 hr 0 mins

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  Greek conservative leader Antonis Samaras…

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ATHENS (Reuters) - Greece's conservative leader begins a frantic hunt on Monday for partners to forge a coalition that protects the country's place in the euro zone after angry voters rejected the two ruling parties for imposing harsh wage and spending cuts.

With counting from Sunday's vote almost complete, conservative New Democracy and Socialist PASOK, who are the only major parties supporting an EU/IMF bailout program that keeps Greece afloat, had won just over 32 percent of the vote and only 149 out of 300 parliament seats.

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The resounding success of anti-bailout parties - ranging from the extreme-right Golden Dawn to the fiery Left Coalition - risks pushing Greece off the austerity path, cutting it off from its financial lifeline and endangering its place in the euro.

With Greece's parliament set to be the most fragmented for decades, coalition talks look difficult and could raise the possibility of a new election as soon as next month if they fail.

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Greeks woke up to headlines like "Country in Limbo" from the Imerisia newspaper and "Nightmare of Ungovernability" in the Ta Nea daily.

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"I'm hopeful but also scared," said 36-year-old Sofia Tsaliki, an office clerk. "New elections won't bring anything, but at least we are giving a message to the politicians and Europeans that they need to take proper notice and cannot ignore us anymore."

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After taking the largest share of votes, New Democracy leader Antonis Samaras is expected to get the first shot at forming a government. But with PASOK beaten into third place, the two must woo one of five parties opposed to Greece's latest bailout package if they are to renew their alliance

Their options are limited. 

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The anti-bailout Leftist Coalition that grabbed second place to emerge as a major election sensation happily crowed that German-led austerity had been defeated and called for a leftist alliance.

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"Greek people gave a mandate for a new dawn with solidarity and justice, instead of barbaric bailout measures," its young leader, Alexis Tsipras, said to roaring crowds.

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The tiny Democratic Left, led by soft-spoken Greek lawyer Fotis Kouvelis, and conservative rebel Panos Kammenos' Independent Greeks, were expected to be aggressively courted, but both have staunchly stuck to an anti-austerity platform.

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The three groups favor Greece staying in the euro, but dismiss suggestions that their stance is contradictory.

They say they can renegotiate the bailout or argue that foreign lenders are bluffing when they threaten to withdraw aid if Greece fails to stick to austerity pledges.

Markets were rattled with the euro dropping to a three-month low and the index of leading European stocks down 0.8 percent.

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As results trickled in, Samaras called for a pro-European national unity government that would keep Greece in the euro zone. PASOK leader Evangelos Venizelos also called for a unity government, saying his party had paid the price for handling the sovereign debt crisis.

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"LIVING AS BEGGARS"

New Democracy polled just below 19 percent and PASOK a humiliating 13.2 percent, while the anti-bailout Left Coalition captured 16.8 percent.

That is a far cry from the 2009 election, when PASOK won a landslide victory with 43.9 percent against New Democracy's 33.5 percent, and the Left Coalition had just 4.6 percent.

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In another indication of the extent of public anger, the ultranationalist Golden Dawn - which denies it is neo-Nazi - was poised to take 7 percent of the vote.

This would be the first time such a party had entered parliament since the fall of a military dictatorship in 1974.

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"I'm shocked they got into parliament. I wasn't expecting it, it's frightening. I think it was an irresponsible vote. We Greeks aren't fascists," said 74-year-old Panos Alexopoulos.

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Under the constitution, Greek President Karolos Papoulias will give the biggest party three days to form a government. If it fails, the next two largest groups get a chance. If they all fail, new polls would be called about three weeks later.

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Greece faces an acid test as soon as next month when it must give parliamentary approval for over 11 billion euros in extra spending cuts for 2013 and 2014 in exchange for more aid from the European Union and International Monetary Fund.

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That looks like a tough task even if a new government can be formed in time. Several analysts said the unprecedented fragmentation of the vote could mean weeks of instability and force another election.

Othon Anastasakis, director of southeast European studies at Oxford University told Reuters: "Greeks are sending a very strong message abroad, which is enough with austerity."

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THREATS IGNORED

The Greek electoral shock coincided with the victory of Socialist Francois Hollande in France's presidential election and was likely to add to pressure for resistance to German-led austerity policies.

Italian technocrat Prime Minister Mario Monti, who faces increasing resistance to austerity at home, phoned Hollande and other European leaders to push for pro-growth policies.

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International lenders and investors fear success for the anti-bailout parties could push Greece to renege on the terms of the program, risking a hard sovereign default and dragging the euro zone back into the worst crisis since its creation.

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Euro zone paymaster Germany has said there would be "consequences" to an anti-bailout vote. The EU and IMF insist whoever wins the election must stick to austerity if they want to receive the aid that keeps Greece afloat.

But Greece's voters dismissed that threat.

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(Additional reporting by Harry Papachristou, Karolina Tagaris, Deepa Babington, Ingrid Melander, Lefteris Papadimas and George Georgiopoulos.; Writing by Dina Kyriakidou and Deepa Babington; Editing by Elizabeth Piper/Mike Peacock)