January 26, 2015
ATHENS, Greece (AP) — Tieless and eschewing the traditional religious swearing-in ceremony, but with a surprise coalition deal in the bag and a sanguine international reception, radical left leader Alexis Tsipras took over Monday as austerity-wracked Greece's new prime minister.
Hours earlier, the 40-year-old's Syriza party trounced the outgoing, conservative government in Sunday's national elections, on a platform of easing social pain and securing massive debt forgiveness. Although Syriza fell tantalizingly short of a governing majority in the 300-seat parliament, Tsipras moved quickly Monday to secure the support of 13 lawmakers from the small, right-wing populist Independent Greeks party, raising his total to 162.
"We have the required majority," Tsipras told Greek President Karolos Papoulias, shortly before being sworn in as prime minister, the youngest Greece has seen in 150 years and the first incumbent to take a secular oath rather than the religious one customarily administered by a Greek Orthodox official.
Initial reactions from international markets and officials from Greece's bailout creditors were markedly unflustered. "We stand ready to continue supporting Greece, and look forward to discussions with the new government," International Monetary Fund director Christine Lagarde said.
Jeroen Dijsselbloem, the Dutchman who chairs eurozone finance ministers' meetings, said that even though "there is very little support for debt write-offs," there is room to "come back to debt sustainability issues" in the future— if necessary.
His views were echoed by the prime minister of Finland, a country that has long been among the most unmovable on austerity issues. Alexander Stubb said that even if he opposes forgiving Greece's debts outright, he would be prepared to discuss extending loan repayments.
In Washington, State Department spokeswoman Jen Psaki congratulated Syriza and Tsipras, and said the U.S. looked forward to working with the new government on "domestic reforms and international efforts to foster Greece's economic recovery."
"There's no question, Greece has made significant progress on a very difficult economic adjustment and reform program," Psaki said. "There are indications that the economy is poised for renewed growth, but many challenges remain."
The alliance between Syriza and the Independent Greeks — two ideologically opposed parties who share only their opposition to the bailout — boosted stock markets across Europe that had fallen on news of the uncertain election results and fear of a second election. After a topsy-turvy session in Athens, stocks closed 3.2 percent down.
Syriza won 36.3 percent of the vote in Sunday's early general elections, 8.5 percentage points ahead of former Prime Minister Antonis Samaras' conservatives. Nazi-rooted Golden Dawn, whose leadership is in prison awaiting trial for allegedly running a criminal organization, came third at 6.3 percent.
The Independent Greeks have pledged to support Syriza in Parliament with its 13 lawmakers, party leader Panos Kamenos said. Syriza officials said the Independent Greeks would take certain cabinet positions, although no details have been revealed so far.
Tsipras has promised to renegotiate Greece's massive bailout agreements, but insists he will not take any unilateral action against lenders from other eurozone countries and the IMF. Tsipras' choice to deal with the nationalist Independent Greeks — a party aligned in Europe with the UK Independence Party — rather than the centrist Potami caused concern that he could take a tough line in negotiations with rescue lenders.
Potami leader Stavros Theodorakis described the Independent Greeks as "far right and anti-European." Syriza's financial planning official, Giorgos Stathakis, confirmed Monday that the new government had no plans to meet with negotiators from the "troika" of the European Central Bank, the European Commission and the International Monetary Fund and would instead seek talks directly with governments.
Greek voters swung to the once-marginal left-wing party after five years of punishing austerity measures demanded under 240 billion euro ($268 billions) bailout deals threw hundreds of thousands of people out of work and left nearly a third of the country without state health insurance.
Thousands of supporters turned out to watch Tsipras speak in central Athens after his opponents conceded. "The Greek people have written history," he said, to cheers. "Greece is leaving behind the destructive austerity, fear and authoritarianism, it is leaving behind five years of humiliation and pain."
Outside the party's campaign tent in central Athens, supporters hugged each other and danced in celebration. "It's like we've been born again and finally feel some hope," said Litsa Zarkada, a former government cleaning worker. "We were thrown into the street just before we could take our pension. We have been through so much."
The new government faces an immediate cash shortage, with a dwindling primary surplus, upcoming loan repayments, and limits on the money it can raise using treasury bill auctions. Megan Greene, chief economist at Manulife Asset Management, said the government will be unable to afford to run its day-to-day operations and pay back debt that falls due in March in the absence of additional cash from international creditors.
"Syriza and its creditors are stuck in a Gordian Knot, and both sides will need to cave on something. Neither Greece nor its creditors want Greece to default or exit the eurozone, so a compromise will probably be found," Greene told the AP.
Derek Gatopoulos in Athens and Raf Casert in Brussels contributed to this story.
ATHENS, Greece (AP) — Tieless and eschewing the traditional religious swearing-in ceremony, but with a surprise coalition deal in the bag and a sanguine international reception, radical left leader Alexis Tsipras took over Monday as austerity-wracked Greece's new prime minister.
Hours earlier, the 40-year-old's Syriza party trounced the outgoing, conservative government in Sunday's national elections, on a platform of easing social pain and securing massive debt forgiveness. Although Syriza fell tantalizingly short of a governing majority in the 300-seat parliament, Tsipras moved quickly Monday to secure the support of 13 lawmakers from the small, right-wing populist Independent Greeks party, raising his total to 162.
"We have the required majority," Tsipras told Greek President Karolos Papoulias, shortly before being sworn in as prime minister, the youngest Greece has seen in 150 years and the first incumbent to take a secular oath rather than the religious one customarily administered by a Greek Orthodox official.
Initial reactions from international markets and officials from Greece's bailout creditors were markedly unflustered. "We stand ready to continue supporting Greece, and look forward to discussions with the new government," International Monetary Fund director Christine Lagarde said.
Jeroen Dijsselbloem, the Dutchman who chairs eurozone finance ministers' meetings, said that even though "there is very little support for debt write-offs," there is room to "come back to debt sustainability issues" in the future— if necessary.
His views were echoed by the prime minister of Finland, a country that has long been among the most unmovable on austerity issues. Alexander Stubb said that even if he opposes forgiving Greece's debts outright, he would be prepared to discuss extending loan repayments.
In Washington, State Department spokeswoman Jen Psaki congratulated Syriza and Tsipras, and said the U.S. looked forward to working with the new government on "domestic reforms and international efforts to foster Greece's economic recovery."
"There's no question, Greece has made significant progress on a very difficult economic adjustment and reform program," Psaki said. "There are indications that the economy is poised for renewed growth, but many challenges remain."
The alliance between Syriza and the Independent Greeks — two ideologically opposed parties who share only their opposition to the bailout — boosted stock markets across Europe that had fallen on news of the uncertain election results and fear of a second election. After a topsy-turvy session in Athens, stocks closed 3.2 percent down.
Syriza won 36.3 percent of the vote in Sunday's early general elections, 8.5 percentage points ahead of former Prime Minister Antonis Samaras' conservatives. Nazi-rooted Golden Dawn, whose leadership is in prison awaiting trial for allegedly running a criminal organization, came third at 6.3 percent.
The Independent Greeks have pledged to support Syriza in Parliament with its 13 lawmakers, party leader Panos Kamenos said. Syriza officials said the Independent Greeks would take certain cabinet positions, although no details have been revealed so far.
Tsipras has promised to renegotiate Greece's massive bailout agreements, but insists he will not take any unilateral action against lenders from other eurozone countries and the IMF. Tsipras' choice to deal with the nationalist Independent Greeks — a party aligned in Europe with the UK Independence Party — rather than the centrist Potami caused concern that he could take a tough line in negotiations with rescue lenders.
Potami leader Stavros Theodorakis described the Independent Greeks as "far right and anti-European." Syriza's financial planning official, Giorgos Stathakis, confirmed Monday that the new government had no plans to meet with negotiators from the "troika" of the European Central Bank, the European Commission and the International Monetary Fund and would instead seek talks directly with governments.
Greek voters swung to the once-marginal left-wing party after five years of punishing austerity measures demanded under 240 billion euro ($268 billions) bailout deals threw hundreds of thousands of people out of work and left nearly a third of the country without state health insurance.
Thousands of supporters turned out to watch Tsipras speak in central Athens after his opponents conceded. "The Greek people have written history," he said, to cheers. "Greece is leaving behind the destructive austerity, fear and authoritarianism, it is leaving behind five years of humiliation and pain."
Outside the party's campaign tent in central Athens, supporters hugged each other and danced in celebration. "It's like we've been born again and finally feel some hope," said Litsa Zarkada, a former government cleaning worker. "We were thrown into the street just before we could take our pension. We have been through so much."
The new government faces an immediate cash shortage, with a dwindling primary surplus, upcoming loan repayments, and limits on the money it can raise using treasury bill auctions. Megan Greene, chief economist at Manulife Asset Management, said the government will be unable to afford to run its day-to-day operations and pay back debt that falls due in March in the absence of additional cash from international creditors.
"Syriza and its creditors are stuck in a Gordian Knot, and both sides will need to cave on something. Neither Greece nor its creditors want Greece to default or exit the eurozone, so a compromise will probably be found," Greene told the AP.
Derek Gatopoulos in Athens and Raf Casert in Brussels contributed to this story.
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