The “result of Greek elections is much more serious than the French one as the former leads to chaos while Hollande will turn out to be a moderate,' tweeted Nouriel Roubini, known as "Dr. Doom" for predicting the 2008 mortgage crisis, following yesterday's elections in Greece and France.
Roubini was responding to early exit polls in Greece, which showed that the two parties which supported the austerity program were trounced in the elections. According to "CNBC", based on 96% of the vote, the ruling coalition, the conservative New Democracy party and Socialist rival PASOK, won 150 of the 300 seats in parliament. The New Democracy party has won 19% of the vote, while PASOK fell to third place, behind the anti-bailout Left Coalition party. The results mean that a coalition will have to be formed, which is liable to be unstable.
A new stable Greek government is critical for continuing the austerity policy of Prime Minister Lucas Papademos, who had promised, in exchange for a bailout that saved Greece from insolvency, massive budget cuts which infuriated the public.
There is now concern that the weakness of New Democracy party and PASOK, which won a combined 37% of the vote according to polls, will force them to establish a broader, but less stable, coalition, which will make it more difficult to pass additional austerity measures that are a condition for receiving addition funds from the €130 billion bailout package.
Published by Globes [online], Israel business news - www.globes-online.com - on May 7, 2012
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