Syriza shakes Europe as it forms Greek coalition government

26th January 2015, Comments 0 comments

Greece's anti-austerity Syriza party quickly formed a coalition government on Monday after its stunning election win that has set the heavily indebted country on a collision course with its creditors.

Syriza and its 40-year-old leader Alexis Tsipras took 149 seats in the 300-seat parliament in Sunday's election, heralding a new mood of anti-austerity defiance in Europe.

"Our victory is also a victory for all European peoples fighting against austerity that is destroying our common European future," Tsipras told supporters after Syriza's victory was confirmed.

Tsipras' first priority will be to rework the terms of Greece's massive 240-billion-euro ($269 billion) EU-IMF bailout.

But renewed fears that Greece could be forced out of the eurozone if it defaults on its debt repayments saw the euro briefly hit an 11-year low against the dollar while Greek stocks also sank in early Monday trading.

Tsipras will be sworn in as Greek prime minister at 1400 GMT -- the youngest in 150 years -- after he forged a coalition with small nationalist Independent Greeks (ANEL) party.

ANEL leader Panos Kammenos said his party was prepared to join Syriza in a coalition.

"From this moment on there is a government," Kammenos told reporters.

A Syriza source said the two parties "will ally themselves to secure a majority in parliament and form a government."

Thousands of people had poured into the streets of Athens after Syriza's bigger-than-expected win made it the first anti-austerity party to take power in Europe.

As supporters waved the party's red and white flag, Tsipras vowed that "Greece is leaving behind disastrous austerity".

Syriza's victory was a "mandate for national rebirth", he said.

- 'Had enough problems' -

Under blue skies in Athens on Monday, many Greeks were optimistic that the fortunes of a country mired in recession for six years were about to change for the better.

Nikos, a Syriza supporter, said: "Today is a very good day. I believe things will go well for our country."

But other Greeks were sceptical.

"There are many promises, but at the end there will be nothing. They only want power," said Athina Mantsino, a woman walking through the capital's Syntagma Square.

In exchange for the bailout in 2010, Greece was forced to slash public sector spending, cut wages and pensions and introduce a far-reaching programme of privatisation.

Syriza has pledged to reverse much of this.

Tsipras told supporters he would work with Greece's partners to find "a just, mutually beneficial and viable solution" to the bailout terms.

Chancellor Angela Merkel of European paymaster Germany swifty made her views clear.

"In our view it is important for the new government to take action to foster Greece's continued economic recovery," her spokesman Steffen Seibert said. "That also means Greece sticking to its previous commitments."

And analysts warned that the eurozone was set for fresh turbulence.

"A period of uncertainty and heightened market nervousness now seems likely," said Jonathan Loynes of Capital Economics.

An EU source conceded Sunday that an improved deal on the bailout would have to be struck with the new force in Greek politics.

Europe's top selling newspaper, Germany's Bild, called Syriza's platform "dangerous" for trying to reverse the economic reforms championed by Germany.

"Sorry, Mr Tsipras, but that goes too far!" Bild declared, saying "Europe had upheld its end" of the deal by providing "more than 200 billion euros" to Greece.

Sunday's poll was Greece's fourth in five years, including back-to-back votes in 2012.

During that time the economy has shrunk by a quarter and unemployment has soared beyond 25 percent.

Outgoing conservative prime minister Antonis Samaras had pleaded with voters not to abandon the painful public sector spending cuts, saying they were helping Greece emerge from recession.

But his New Democracy party was routed and reduced to 76 seats.

- Inspiration to others -

Syriza's victory could inspire other anti-austerity parties in Europe, including Spain's Podemos, which has topped several opinion polls and is aiming for an absolute majority in the Spanish election due in November.

"The Greeks are going to have a true Greek president, not a delegate of... Merkel," said Podemos leader Pablo Iglesias.

British finance minister George Osborne said what Syriza was proposing was "incompatible with what the eurozone currently demands of its members."

However other European countries struck a warmer tone, saying they were prepared to work with the new Greek government.

French President Francois Hollande congratulated Tsipras and Spain's conservative Prime Minister Mariano Rajoy said he hoped the victory would lead to a "stable government".

Italy saw the result in Greece as possibly helping its push for greater flexibility in the EU's approach to budget and broader economic issues, Foreign Minister Paolo Gentiloni said.

"There has been a tug of war for months between austerity and flexibility," Gentiloni told Italian TV.

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© 2015 AFP

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