Greece’s ruling parties suffer major setback

With 97 per cent of the votes counted in Greece’s crucial parliamentary elections, the two long-term ruling parties have lost support to anti-austerity parties. Analysts warn it could potentially endanger the country’s debt obligations.

According to early results, the center-left party PASOK has received 13.3 per cent, down from 43.9 per cent in the 2009 elections. So far the leading party is the center-right New Democracy with 19 per cent of the vote and 109 seats, down from 33.5 per cent in 2009.The voters had been expected to punish the two main parties for the harsh austerity measures imposed during the spiraling economic crisis. Leadership has alternated between PASOK and New Democracy for the last 38 years. Typically they take around 80 per cent of the vote.Altogether there are 32 parties vying for position in the nation’s parliament with smaller more radical groups expected to gain ground. Up to 10 were predicted to win seats according to polls. They offer an alternative to the unpopular cuts and are capitalizing on public disillusionment over the current government’s mismanagement of the country.The PASOK and New Democracy parties both begrudgingly supported the 110 billion-euro European bailout agreed last year to save Greece’s moribund economy. The agreement prompted a chain of crippling austerity measures that have drawn the ire of the Greek public. Former Finance Minister Evangelos Venizelos, now head of PASOK, warned the Greek public that the country could face expulsion from the eurozone should anti-bailout parties take power."Sunday will decide whether we remain in Europe and the euro, and we stay on a course that is difficult but safe, after having covered most of the distance, to finally emerge from the crisis and [austerity]," he said during his final campaign rally in central Athens on Friday night.Political analysts have expressed concerns that a lack of unity in the Greek government could potentially endanger the country’s debt commitments and bring about another bailout or possible exit from the eurozone."Political paralysis in Greece following the elections could lead to a default and even threaten a euro exit, in our view," Bank of America strategist Athanasios Vamvakidis wrote in a paper published on Tuesday.The knock-on effect of Greece leaving the eurozone could sound a death-knell for both the Italian and Spanish economies, both flagging under the weight of toxic debt.The biggest surprise of this elections is the success of Greek extreme-right Golden Dawn party which is projected to enter parliament for the first time in nearly 40 years, according to exit polls. The neo-Nazi party is poised to take about 7 per cent of the vote which is comfortably above the 3 per cent threshold required to enter parliament. “A new nationalist movement dawns. Hundreds of thousands of Greeks have dynamically joined the national cause for a great, free Greece,” Golden Dawn said on its website. The extreme-right party’s success is fueled by rising anti-immigrant sentiments amid the deteriorating economic crisis that has led to recession and unemployment.