Greek Election Results: Syriza Loses and Greece Will Remain in Euro Zone
Greece will likely stay in the euro zone after a critical vote on Sunday pushed the conservative New Democracy Party ahead of the anti-austerity Syriza, forcing a coalition government that will be unable to completely unplug from the integrated European financial system and return to the Drachma.
New Democracy won 29.5% and 50 seats in parliament, while Syriza came in close behind with 27.1%. PASOK, the socialist party which had long ruled Greece, notched just 12.3%.
No single party will have enough seats to govern by itself and New Democracy must now form a coalition.
If Syriza had won outright, Greece would have likely exited the euro zone and defaulted on its loans, an event which would have sent the world financial system into turmoil.
After the Sunday election, the 300 seats would be distributed thus: New Democracy 127 (including the bonus 50 for winning), Syriza 72, Pasok 32, Independent Greeks 21, Golden Dawn 19, Democratic Left 16, Communist Party of Greece 13.
New Democracy leader Antonis Samaras says "the Greek people today voted for Greece to remain on its European path and in the euro zone."
He says voters chose "policies that will bring jobs, growth, justice and security.” He will form a pro-bailout government.
Syriza chief Alexis Tsipras, who wanted to cancel Greece's international bailouts, has conceded the election.
What can we expect immediately these election results?
Firstly, financial markets should be mostly calm.
Asian markets will be the first to react, but the biggest movement because of these elections will happen in the European markets and on Wall Street. If Asian and European markets fall, expect a heavy dive on Wall Street Monday morning.
On Friday, Asian stock markets were up for the second straight week on expectations that major central banks in the world would act to tackle deteriorating global economic conditions.
If the two major pro-bailout parties, the New Democracy and PASOK, form a united pro-bailout front, it will be positive for the markets as the probability of a Greek exit would be reduced.
The markets will react negatively if Syriza forms an anti-bailout coalition government, or hinders the New Democracy-PASOK coalition as that scenario could lead to the debt-ridden country's exit from the euro zone and intensify the global economic crisis once again.
Things will be more clear come Monday.
If you haven't been following the elections closely, here's what you need to know: In February, the European Central Bank, the European Commission, and the IMF (known as the "troika") agreed to give Greece a $170 billion bailout for its billions of dollars of debt. But, in return, Greece had to impose a series of austerity measures which were deeply unpopular with voters.