Monday, June 18, 2012

Pro-bailout party wins Greek election

WASHINGTON (AP) -- A slim victory for the main conservative party in an election in Greece should relax fears that a country will stop using the euro for the first time and possibly unleash global financial turmoil.
But when it comes to Greek politics - and European economic policy - it's never that easy. So the bumpy ride for financial markets isn't over yet.

Although the Greek poll result eased imminent fears of a Greek exit from the euro, concerns over Spain's sovereign debt problems prompted a rise in the country's 10-year bond yields, which spiked over 7pc. Italy's 10-year yield breached 6pc.
Political parties, led by New Democracy leader, Antonis Samaras, began forging a government on Monday. David Cameron, who is in Mexico for the G20 summit, said the outcome of the Greek election looked clear, but warned a delay in forming a government "could be very dangerous".
"The outcome of the Greek election looks clear in terms of a commitment to stay in the eurozone and to accept the terms of the memorandum," the prime minister said. "But I think those parties that want that to happen can't afford to delay and position themselves. If you are a Greek political party and want to stay in the eurozone and accept the consequences that follow you have got to get on with it and help form a government. A delay could be very dangerous."