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Pro-bailout party wins Greek election

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Greek bailout party wins Greek election

The New Democracy party has secured a narrow victory in the election in Greece, which means the country looks set to continue adhering to the terms of its bailout.

Voters had gone to the polls last month but the outcome proved inconclusive, while talks on putting together a coalition government came to nothing. The European Union (EU) and the International Monetary Fund's (IMF) terms regarding financial support for the beleaguered nation proved particularly divisive, with New Democracy backing the deal and Syriza choosing to reject it.

However, New Democracy's victory in the second election means Greece will not now be forced to pull out of the euro – a development that some had predicted would lead to contagion across the eurozone. It is now working to form a coalition with other pro-bailout parties to ensure the country meets the requirements laid out by the EU and the IMF.

Foreign exchange specialist HiFX has welcomed the result of the election, noting it has led to a "palpable" sense of relief around the world and on the financial markets.

Nevertheless, director Jason Gaywood believes question marks over the stability of the eurozone still remain. Indeed, he said that with Greece and Germany both having extremely "divergent" economies, some may doubt whether it is realistic to have a single currency and interest rate for the two countries.

"Only time will really tell if Greece can drag itself out of the mire from here, but the odds remain stacked against both Athens and the eurozone as a whole," Mr Gaywood commented.

He argued that Greece's problems are compounded by the fact New Democracy only won the election by a very narrow margin, which means a high proportion still harbour the view that rejecting the bailout terms remains the best course of action.

Mr Gaywood said this means the country could experience further civil unrest at some point in the future.

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