Fears were growing on Monday night of a fresh crisis in the eurozone after Greece failed to elect a head of state, triggering a snap election that is tipped to bring radical, anti-austerity leftists to power. The Athens stock exchange slumped by more than 10% at one point as concerns mounted over the political turmoil likely to hit the twice bailed-out country. The effective interest rate on the nation’s three-year debt soared to more than 12% – signalling investor fears that Greece will not be able to repay its loans in the short term. Elections were called for 25 January after the government failed to find enough votes to elect its preferred candidate for president, the former European commissioner Stavros Dimas. With the vehemently anti-cuts Syriza opposition ahead in the polls, the campaign will now revive the debate about austerity policies across the eurozone and raise questions over the harsh terms attached to Greece’s €240bn (£188bn) bailouts.
The leftists have declared that renegotiation of the accords Athens has signed with the EU, European Central Bank (ECB) and International Monetary Fund – the lenders that have kept the country afloat – will be among its top priorities. Syriza would also seek to write off the country’s monumental €320bn debt – an aim that has revived fears of Greece clashing with creditors and being ejected from the eurozone.
The new threat comes six years after the country’s near economic collapse first sent panic through global markets and two years after prime minister Antonio Samaras came to power with his conservative-dominated two-party alliance.
Following the vote, Syriza’s leader, Alexis Tsipras, said the country had experienced “a historic day”, adding: “In a few days the Samaras government, which pillaged the country, will belong to the past, as will the memoranda of austerity.”