Greek conservatives end socialist rule

Greek conservatives ended a decade of socialist rule with a resounding election victory yesterday which handed new Prime Minister Costas Karamanlis the challenging job of overseeing this year's Olympic Games.

After exit polls indicated a win of around five percentage points for the New Democracy party of Mr Karamanlis, socialist leader George Papandreou conceded defeat.

"New Democracy has won the elections. I wish (Mr) Karamanlis success in his work for the good of Greece," said Mr Papandreou, head of the socialist Pan Hellenic Socialist Movement (PASOK), which has governed Greece since 1993.

Mr Karamanlis, a US-educated lawyer, takes power just five months before the August Olympic Games, a massive security and logistical operation for which preparations are behind schedule.

Quick decisions are also needed on reuniting Greek and Turkish Cypriots before the island joins the European Union in May.

The nephew of a former conservative prime minister who led Greece out of military dictatorship in 1974, Mr Karamanlis told Reuters earlier this week he would work to bring foreign investment to Greece if his party won the parliamentary poll.

Television station exit polls broadly agreed on the margin of victory, with state television Net forecasting New Democracy winning 45.5 per cent of the vote by 10 million Greeks and PASOK 40.2 per cent.

The election, called last January when the conservatives had an opinion poll lead of up to seven percentage points, was regarded as the most significant since military rule ended.

The new government's other main tasks during its four year term include tackling inflation and nearly 10 per cent unemployment.

"This is an intensely anti-PASOK vote and not so much one in favour of New Democracy," pollster Andreas Panagopoulos told Reuters. "We see a high percentage of PASOK voters turning to New Democracy."

Celebrations erupted outside New Democracy headquarters after announcement of the exit polls. Hundreds of supporters waving Greek and party flags cheered and awaited the arrival of Mr Karamanlis.

The main choice of the election was between the inheritors of two family political dynasties which have dominated modern Greek politics.

On the right was Mr Karamanlis, nephew of the former prime minister who restored democracy to Greece after seven years of military rule.

On the left was Mr Papandreou, grandson and son of former prime ministers, who failed in a bid to win the party's fourth consecutive election since 1993.

In the 2000 election, PASOK won 158 seats in the 300-member parliament. New Democracy, under Mr Karamanlis, took 125.

"At this early stage it looks like New Democracy could get about 170 seats. Pasok could get less than 120 seats," Metron Analysis pollster Stratos Fanaras told Antenna TV as the first exit polls were announced.

There were few major policy differences between the two parties, with each promising incentives to attract wary foreign investors as well as better health care and education.