CNN, DIE ZEIT, BLOOMBERG
LONDON – World leaders have enthusiastically welcomed the narrow election victory of Greece’s pro-bailout New Democracy and Pasok parties –world markets, not so much.
The center-right New Democracy and center-left Pasok parties won a combined 162 seats in Greece’s parliamentary elections, enough to form a majority in the 300-member parliament, easing concern that Greece would reject austerity measures needed to qualify for aid and remain a part of the European single-currency union.
New Democracy and Pasok claimed “a victory for all Europe” after coming out ahead in Sunday’s elections, a vote seen as a referendum on the survival of the euro, CNN reports.
German Finance Minister Wolfgang Schäuble hailed the results, adding that “the way to stability and prosperity is neither short, nor easy –but it’s the only way,” Germany’s Die Zeit reports.
But according to BBC News, after an initial boost in both Asian and European markets to the Greek results, gains were quickly moderated as investors remain cautions about the situation, waiting for a viable coalition to be formed. The Wall Street Journal reports that Spain’s 10-year government bond yield soared above 7%.
“Any relief following the Greek election results should be brief,”” Ciaran O’Hagan, head of interest-rate strategy at Société Générale SA in Paris, told Bloomberg. “At best, we are facing a muddle-through scenario in Greece.”