ASIAN MARKETS REBOUND ON GREEK POLLS

19 Ιουλίου 2012

Asian markets rebounded on Monday as Greece’s pro-bailout party New Democracy winning enough votes to form a government has bought time to prevent a further worsening of the crisis.

The Interior Ministry of Greece announced that the right-wing New Democracy party won 29.7 percent of the votes, the left-wing Syriza was second with 26.9 percent and the center-left Pasok party was third with 12.3 percent in Sunday’s elections.

Asian markets welcomed the news, while markets in Europe sent mixed responses in early trading. In Asia, Japan’s Nikkei Stock Average rose 1.77 percent to 8721.02. The Shanghai Composite Index rose 0.4 percent to 2316.05. Hong Kong’s Hang Seng Index climbed 0.95 percent to 19415.93.

But major stock markets in France and the United Kingdom lost slightly in early trading, while markets in Germany climbed.

New Democracy leader Antonis Samaras will launch coalition talks after coming first in the second election within a few weeks. Though holding 129 of parliament’s 300 seats, Samaras’ party lacks enough legislators to govern alone, and it must seek allies among the smaller pro-bailout Pasok.

Local observers say the new government may possibly be formed within two or three days.

According to European media reports, eurozone countries have extended the hand of compromise to Greece after the victory of parties supporting international bailout, showing some flexibility on the painful reforms.

The head of the Eurogroup’s finance ministers, Jean-Claude Juncker, said the eurozone “acknowledges the considerable efforts already made by the Greek citizens”.

The UK’s Sky News said Germany has been one of the most hardline eurozone nations, which insisted that Greeks have to implement the agreed deal if they want the bailout funds needed to keep the country from going bankrupt and possibly exiting the euro.

But Chancellor Angela Merkel congratulated Greece’s pro-bailout leader Samaras on his election victory, and told him she is now confident Athens will abide by its European pledges.

French Finance Minister Pierre Moscovici said the eurozone will demand that the undertakings made by the Greeks to keep it in the euro are kept, but will also pay attention to Greece’s particular social and economic situation. But Belgium’s Foreign Minister Didier Reynders said that there is “room for maneuver” on the time Greece needs to deliver on bailout commitments.

Greek business leaders urged the new government, after formation, to act quickly to talk with its Chinese counterparts to get investors into its massive privatization plan.

Constantine Yannidis, president of the Hellenic Chinese Chamber, said: “I believe that after the elections and the emergence of the new government, the Greek economy will gradually start to find the right path. We will regain the confidence of foreign markets and foreign investors.”

Yannidis said Chinese investors have shown great interest in investing in Greece and this week he is receiving a business delegation from Shaanxi province.

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