Alexis Tsipras, head of radical leftist Syriza party, greets supporters after the initial election results for the Greece general elections in Athens on Jan. 25.(Photo: Alexandros Vlachos, EPA)
Fresh concerns about the future of the eurozone resurfaced to unsettle markets Monday after Greece's far-left Syriza party swept to power supported by voters opposed to the terms of the nation's international bailout.
With most of the votes counted, Syriza party leader Alexis Tsipras agreed to form a coalition government with the Independent Greeks party, a right-wing group that is opposed to the budget cuts and other austerity measures demanded by the European Commission, European Central Bank and International Monetary Fund.
That $270 billion bailout has allowed Greece to avoid bankruptcy. Syriza failed to win the requisite 151 out of 300 parliamentary seats that would have allowed it to form a government on its own.
Tsipras has vowed to get better terms for Greece as it battles 26% unemployment and an anemic growth rate that has seen GDP plunge 30% below where it was before the financial crisis. One-third of Greece's population lives below the poverty line.
The Athens Stock Exchange was earlier down nearly 4% before recovering some of those losses. Markets across Asia and Europe were weaker, although the euro currency strengthened slightly Monday after last week falling on an expected Syriza victory to its lowest level in over 11 years. It was recently trading at $1.1253. It fell as low as $1.1098 on Friday.
"The reversal may reflect the extent to which the Syriza victory was well-telegraphed months ago ... as well as the fading supply of negative news-flow threatening the (euro)," said Ilya Spivak, currency strategist, at DailyFX, an online trading brokerage.
Giorgos Stathakis, Syriza's financial planning official, said Monday that the new government had no plans to meet with negotiators from the "troika" of the EC, ECB and IMF and would instead seek talks directly with governments.
"The Greek people have written history," Tsipras said in Athens. "Greece is leaving behind catastrophic austerity, fear and autocratic government."
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