Greece Faces Snap Election as Presidency Pick Fails

By Eleni Chrepa and Paul Tugwell

Photographer: Thanassis Stavrakis/AP Photo

Greek Prime Minister Antonis Samaras votes during the third round of voting to elect a... Read More

Greece faces snap elections next month after Prime Minister Antonis Samaras failed in his third and final attempt to persuade parliament to back his candidate for head of state.
Stocks and bonds dropped in Athens today after 168 lawmakers in the 300-seat chamber backed Samaras’s nominee for president, Stavros Dimas, short of the 180 votes required. Under the constitution, the legislature will now be dissolved and a date for elections set within the next 10 days. Samaras said he will ask for the election to be held on Jan. 25.
The prospect of early parliamentary elections has roiled financial markets in Greece as it evoked memories of the height of the financial crisis in 2012 when the country’s euro membership was in jeopardy. The anti-austerity Syriza party led by Alexis Tsipras is ahead of Samaras’s New Democracy movement in opinion polls.
“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.”

Photographer: Chris Ratcliffe/Bloomberg

The anti-austerity Syriza party led by Alexis Tsipras is ahead of Samaras’s New... Read More

Yields Jump

The yield on the 10-year Greek bond jumped after the vote was announced in parliament, and was up 99 basis points to 9.46 percent as of 1.01 p.m. in Athens. The benchmark Athens Stock Exchange was down 8.5 percent after falling more than 11 percent earlier in the day, the biggest slump among 18 western-European markets.
Samaras, who failed to gather enough support for Dimas in two previous rounds of voting, on Dec. 17 and Dec. 23, called on lawmakers before today’s session to avert a dissolution of parliament, saying that snap elections posed a danger to the country.
Heading a coalition of 155 lawmakers, he’d offered to form a broader administration and hold early parliamentary elections at the end of 2015 if lawmakers backed his nominee. His coalition’s term doesn’t expire until June 2016.
Tspiras, speaking to reporters after the vote, said that the Greek people were determined to put an end to austerity, and that in a few days the bailout memorandum and its policies will be confined to the past. Today is a “historic day” for democracy, he said.
“Syriza’s program includes blackmailing the European Union by not paying the debt Greece owes to European countries,” Nicholas Economides, an economics professor at New York University’s Stern Business School, said in an e-mail before the vote. “It also includes significant increases in salaries, pensions, and the number of civil servants. None of these actions are feasible with Greece in the euro zone.”