The Greek opposition party Syriza won a resounding victory in Sunday's election promising to end the austerity policies that have crippled the economy and given Greece the highest unemployment in Europe.
While promising to keep Greece within the euro, Syriz'a leader and the new Prime Minister Alexis Tsipras, campaigned on ending the austerity programs forced on Greece by the European Commission, the International Monetary Fund and the European Central Bank as the condition for the bailout packages that have kept the Mediterrean nation from default.
In his victory speech, Tsipras said the changes are necessary, "for Greece and it speople to regain thier lost dignity."
The strict austerity terms required reducing the government's deficits, public payroll reduction and assets sales have produced the highest unemploymnet rate in Europe. And while Greece has finally exited six years of recession the New Democracy party of outgoing Prime Minister Samaras recieved much of the blame for the unhappiness of the Greek electorate.
The austerity program was the price for 240 billion euros of monetary support since may 2010 without which Greece would have long since defaulted on its debt.
While Greek stocks and bonds fell the euro rose for the first time in three days. Equities in New York, where a major snowstorm may force an early close to markets falling, were lower also.
The ECB's new debt purchase plan will buy 60 billion euro a month for european sovereign debt until September 2016 may have helped shield credit markets from any contaigon from the elections. Yields on equivalent credit instruments from Germany to France, Italy and Portugal were slightly lower or unchanged.
Currency traders for the time being seem to be taking a wait and see attitude to the threat that Greece will leave the euro. The united currecy has rebounded to 1.1260 in mid-morning action having touched 1.1096 earlier.
In the final days of the campaign Mr.Tsipras moderated his rhetoric stressing the negotiation with his European partners and repeating his desire to keep Greece within the euro.
The European Cimmissinhas said that it is ready to talk with the new government but after four years of grinding austerity in Greece Mr.Tsipras may be hard pressed to satisfy the electorate and his european partners.
Greece will require further funding no later than July. An extension of the current bailout program expires at the end of next month.
A spokesman for German Chancellor angel merkel said today in Berlin, that, the situation "is no different than before the election," Greece needs to keep its commitments. "The German govenment-and that naturally includes the chancellor-is offering to work with the new government. We have an interest in a very good, friendly Greek-German relationship."
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