The German media has warned Greeks that their creditors would not allow the electoral triumph of radical left party Syriza to back them into a corner in talks on Athens' massive debt.
“Sorry, Mr Tsipras, but that goes too far!” warned the daily Bild, Europe's top-selling newspaper, referring to Syriza leader Alexis Tsipras. Bild called Syriza's platform “dangerous” for trying to reverse economic reforms championed by Germany, the paymaster of eurozone bailout packages.
“The eurozone is not a gambling den where everyone can play as he likes,” Bild fumed.
“A treaty is a treaty,” it declared, saying that “Europe had upheld its end” of the deal since 2010 by providing “more than €200 billion “ to Greece.
News website Spiegel Online was more measured, saying it was possible to see Syriza's stunning victory as a “horror scenario”. But it said that “this vote could also go down in history” marking “the day when Greeks took their own destiny into their hands”.
“Tsipras deserves a chance. Were the Greeks really supposed to vote for a party that has driven the country to its knees?” it asked, referring to Prime Minister Antonis Samaras's New Democracy party.
The conservative Frankfurter Allgemeine Zeitung called the result “the expression of the deep frustration of the electorate with the austerity policies of the last few years” as well as short-sighted actions of the established parties.
“But no matter what Tsipras has promised the Greek people, he can't avoid one truth: Greece needs more foreign money, either from the markets or from the EU,” it said. “He must choose between compromising with the troika (the European Central Bank, the European Union and the International Monetry Fund) or complete state bankruptcy, which would push Greece even more into the abyss.”
With 99 per cent of the votes counted, Syriza and its 40-year-old leader Tsipras won 149 seats in the 300-seat Greek parliament, just two short of an absolute majority.
Samaras's New Democracy party was reduced to 76 seats.
COALITION TALKS
Prime Minister-elect Alexis Tsipras this morning struck a deal with a right-wing party to form a government to confront international lenders and reverse years of painful austerity following a crushing election victory by his Syriza party.
The success of the anti-bailout party reignites fears of a 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 a party rejecting German-backed austerity, emboldening anti-austerity movements elsewhere.
The 40-year-old Tsipras quickly sealed a deal on a coalition with the head of the small Independent Greeks party which, like Syriza, opposes Greece's bailout deal.
"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," Panos Kammenos said after talks with Tsipras at Syriza's headquarters in Athens.
A deal with the right-wing party makes an unusual alliance between parties on the opposite end of the political spectrum but brought together by a mutual hatred for the EU/IMF bailout programme keeping Greece afloat.
Reaction from financial markets to Syriza's victory was largely muted, with the euro recovering from a tumble to a 11-year low against the dollar on initial results. Greek stocks dipped slightly while 10-year bond yields rose.
GREECE 'MUST PAY ITS DEBTS'
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.
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.
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 from Germany in particular.
With Greece unable to tap the markets because of sky-high borrowing costs and facing about 10 billion euros of debt payments this summer, he will have to seek a deal to unlock more than 7 billion euros of outstanding aid by the time the bailout is due to expire on Feb. 28.
However, Syriza's victory will also encourage other anti-austerity forces in Europe and add impetus to calls for a change of course away from the focus on budget belt-tightening and structural reform favoured by Berlin.
Those calls have come not just from anti-system movements such as Podemos in Spain but also from leaders such as French President Francois Hollande, who congratulated Tsipras on his win, and Italian Prime Minister Matteo Renzi
IMF's LAGARDE RULES OUT SPECIAL TREATMENT FOR GREECE
International Monetary Fund chief Christine Lagarde said in a newspaper interview today that Greece must respect the euro zone's rules and cannot demand special treatment for its debt in the wake of the victory of anti-austerity party Syriza.
"There are internal euro zone rules to be respected," Lagarde told Le Monde daily. "We cannot make special categories for such or such country."
Lagarde added that Greece still needed to carry out key reforms, such as tax collection and reducing judicial backlogs.
"It's not a question of austerity measures, these are in-depth reforms that remain to be done," she said.