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 The decisive victory by Tsipras' Syriza in Sunday's snap election
reignites fears of new financial troubles in the country that set
off the regional crisis in 2009. It is also the first time a member
of the 19-nation euro zone will be led by parties rejecting
German-backed austerity.
Tsipras’ resounding victory is likely to empower Europe's fringe
parties, including other anti-austerity movements across the
region’s economically-depressed southern rim. The trouncing of
conservative Prime Minister Antonis Samaras represents a defeat of
Europe’s middle-ground political guard, which has dallied on a
growth-versus-budget discipline debate for five years while voters
suffered.
Within hours of victory on a campaign of "Hope is coming!", the
40-year-old Tsipras sealed a coalition deal with the small
Independent Greeks party which also opposes Greece's EU/IMF aid
program.
Syriza won 149 seats in the 300-seat parliament, leaving it just two
seats short of an outright majority and in need of a coalition
partner. The Independent Greeks won 13 seats.
 "From this moment there is a government in the country. The
Independent Greeks give a vote of confidence in Prime Minister
Alexis Tsipras. There is an agreement in principle," the smaller
party's leader Panos Kammenos said after talks with Tsipras.
The alliance is an unusual one between parties on the opposite end
of the political spectrum brought together by a mutual hatred of the
240-billion-euro bailout program keeping Greece afloat at the price
of budget cuts.
The Independent Greeks and Syriza are at odds on many social issues
such as illegal immigration, raising the prospect of tensions within
a coalition united by its opposition to the international bailout.
An alliance between the two sides would suggest a hardline stance
against Greece's creditors, who have dismissed Tsipras's demands for
a debt write-off and insisted the country stay on the path of
reforms and austerity to get its finances back on track.
"At first sight this looks like a very strange marriage, but both
parties share a strong opposition to austerity," said Diego Iscaro,
an analyst at IHS Global Insight.
Tsipras is expected to meet President Karolos Papoulias at 1530
local time (0830 ET) to assume the mandate to form a government and
be sworn in as prime minister at 1600 on Monday. He is expected to
announce his cabinet on Tuesday.
Reaction from financial markets to Syriza's victory was largely
muted, with the euro recovering from a tumble to an 11-year low
against the dollar on initial results. Greek stocks fell 1.5 percent
while 10-year bond yields rose.
In a sign of the changes already being ushered in, Tsipras will meet
Greece's Archbishop Ieronymos on Monday to say he plans to take a
non-religious oath rather than being sworn in over a Bible as per
tradition, Syriza's spokesman said.
For the first time in more than 40 years, neither the New Democracy
party of Samaras nor the center PASOK, the two forces that had
dominated Greek politics since the fall of a military junta in 1974,
will be in power.
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Tsipras also intends to talk to the heads of two other parties, the
centrist To Potami and the communist KKE, after being sworn in to
seek their support even if they do not join the coalition.
"CATASTROPHIC AUSTERITY"
Together with last week's decision by the ECB to pump billions of
euros into the euro zone's flagging economy despite objections from
Germany, Syriza's victory marks a turning point in the long euro
zone crisis.
It signals a move away from the budgetary rigor championed by
Germany as the accepted approach to dealing with troubled economies,
though it is unclear the extent to which Syriza will be able to
wring concessions and aid from creditors.
"Greece leaves behind catastrophic austerity, it leaves behind fear
and authoritarianism, it leaves behind five years of humiliation and
suffering," Tsipras, pumping his fist in the air, told thousands of
cheering supporters in Athens on Sunday.
But after the euphoria of election night, hailed by flag-waving
crowds in Athens, Tsipras faces daunting challenges and can expect
strong resistance to his demands for a debt write-off from Germany
in particular.
Hours after Syriza's victory, ECB Executive Board member Benoit
Coeure said that Greece had to pay its debts and warned Tsipras to
play by the "European rules of the game".
"There is no room for unilateral action in Europe, that doesn't
exclude a discussion, for example, on the rescheduling of this
debt," Coeure told Europe 1 radio.
With Greece unable to tap the markets because of sky-high borrowing
costs and facing about 10 billion euros of debt payments this
summer, Tsipras may find himself with limited room to fight
creditors.
During campaigning, Tsipras promised to immediately end the huge
budget cuts and heavy tax rises that have help send unemployment to
over 25 percent and pushed millions into poverty. But the new prime
minister will also need a deal to unlock more than 7 billion euros
of outstanding aid to make debt payments in the summer.
(Additional reporting by Angeliki Koutantou, Lefteris Papadimas and
George Georgiopoulos, Writing by James Mackenzie and Deepa
Babington; editing by Anna Willard)
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