Greeks endorse return of Tsipras as Prime Minister

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Greece's radical left Syriza party secured a clear mandate in the country's third national vote of the year and is on course to form a near clone of the previous government as early as Monday.

The victory defied expectations for an inconclusive result, even a possible victory by the opposition New Democracy party, which had accused Syriza of plunging the country back into recession after tentative growth in 2014.

"This is your victory," Syriza leader Alexis Tsipras told his cheering supporters Sunday night in Athens. "I feel vindicated tonight."

The vote ensured Europe's most outspoken leftist leader would remain Greece's dominant political figure, despite having been abandoned by party radicals last month after he caved in to demands for austerity to win a bailout from the euro zone.

In his victory speech, Mr. Tsipras made no specific reference to the €85-billion ($126-billion) bailout, but Syriza campaigned on a pledge to implement it, while promising also to introduce measures to protect vulnerable groups from some aspects of the deal.

Syriza's victory will embolden the anti-austerity movement across the European Union, including Syriza-sympathizer Podemos in Spain and Britain's Labour Party, whose new leader, Jeremy Corbyn, is steering the party to the hard left.

Mr. Tsipras's first task after forming a government will be to persuade European Union lenders that enough agreed steps have been made to ensure the next payment. The bailout program is due for a review next month.

The Syriza victory removes any immediate threat that Greece, which has been in near-continuous deep recession since the 2008 financial crisis, will leave the euro and reprint the drachma. Syriza opposed the harsh austerity measures that were demanded in exchange for Greece's international bailouts, but not to the point they were willing to abandon the country's bailout program, drop out of the euro zone, default on country's crushing national debt and risk a bank meltdown.

"After years of almost unprecedented crisis, the vast majority of Greeks are endorsing parties that are promising to keep the country in the euro even if that implies thorough and painful reforms," said Holger Schmieding, chief economist at Germany's Berenberg Bank.

An official projection from Greece's Interior Minister reported late Sunday that Syriza was on course to win 35.5 per cent of the vote, giving it 145 seats in the 300-seat parliament. New Democracy, the main opposition party that was swept away by Syriza in the January general election, placed a distant second, with 28 per cent of the vote, good for about 75 seats.

Coming third was Golden Dawn, the neo-Nazi, anti-immigrant party that seems to have profited from the refugee crisis that has gripped the European Union. It was projected to take 7.2 per cent of the vote, giving it 19 seats, two more than in the January election. For Golden Dawn, it was a remarkable achievement given than most of its leadership is behind bars, awaiting trial for running an alleged criminal conspiracy.

Syriza is almost certain to form a coalition with Independent Greeks (Anel), the right-wing populist party that was Syriza's partner in the last government. Its leader, Panos Kammenos, joined Mr. Tsipras on the victory stage, suggesting that the coalition was a done deal.

Independent Greeks was on course to win only 10 seats, down from 13 seats. But the combined total of Syriza and Independent Greeks – 155 seats, down from 162 seats – would be enough to give the coalition a five-seat majority.

As if to prove that the anti-euro movement in Greece was all but dead, Popular Unity, the party founded in the summer by the far-left Syriza faction that defected from the main party, fell short of the 3-per-cent threshold for seats in parliament. Popular Unity opposed austerity and campaigned for Greece's withdrawal from the euro zone.

Ahead of the election, most polls put Syriza equal with, or slightly ahead, of New Democracy. An outright victory by Syriza was always considered unlikely because the party alienated some supporters and members of Mr. Tsipras's own party by essentially doing the opposite of what he promised to do in the January election.

Mr. Tsipras's victory makes him one of Europe's most successful politicians, with three national votes all going in his favour within the space of nine months. In spite of this, Greece's bailout creditors are unlikely to cut him much slack. The new government is under pressure to implement the spending cuts, tax hikes and economic reforms, including privatizations, that it promised in exchange for the latest bailout. It must also agree to a plan to inject massive amounts of new capital into its banks, which have remained partly closed since July, when a run on deposits almost destroyed them.

Megan Greene, chief economist in Boston with Canada's Manulife and John Hancock Asset Management, said in a Friday note that Greece is bound to struggle economically under the new bailout. "Given that the German Chancellor and the Finance Minister both concluded maybe Greece should exit the euro zone back when negotiating Greece's third bailout, it seems likely they will come to this conclusion again in the future," she said. "Greece may be off the front pages for newspapers for now, but it is unlikely to last very long."

With a report from Reuters