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Greek local vote soothes money markets

 Pedestrians walk in front of the central kiosk of Athens' candidate mayor Giorgos Kaminis who is backed by government's party PASOK and Democratic Le...
 A father carries his son as he waits to vote during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks were casting ballots...
 A young girl holds her mother as she casts her ballot during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks were castin...
 Greek Prime Minister George Papandreou shakes hands with people during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks w...
 Greek Prime Minister George Papandreou leaves the election booth during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks ...
 An elderly man casts his ballot during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks were casting ballots Sunday in lo...
 New Democracy opposition conservative leader Antonis Samaras casts his ballot during the municipal and regional elections in Pylos, about 288 kilomet...
 A young girl smiles behind the election booth as his father casts his ballot during the municipal and regional elections in Athens, Sunday, Nov. 7, 2...

Greece Elections

Pedestrians walk in front of the central kiosk of Athens' candidate mayor Giorgos Kaminis who is backed by government's party PASOK and Democratic Le...

Greece Elections

A father carries his son as he waits to vote during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks were casting ballots...

Greece Elections

A young girl holds her mother as she casts her ballot during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks were castin...

Greece Elections

Greek Prime Minister George Papandreou shakes hands with people during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks w...

Greece Elections

Greek Prime Minister George Papandreou leaves the election booth during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks ...

Greece Elections

An elderly man casts his ballot during the municipal and regional elections in Athens, Sunday, Nov. 7, 2010. Greeks were casting ballots Sunday in lo...

Greece Elections

New Democracy opposition conservative leader Antonis Samaras casts his ballot during the municipal and regional elections in Pylos, about 288 kilomet...

Greece Elections

A young girl smiles behind the election booth as his father casts his ballot during the municipal and regional elections in Athens, Sunday, Nov. 7, 2...

More than six months after they started a painful austerity program, Greece's governing Socialists have won a narrow lead in local polls _ unimpressive, but enough to drive off the specter of an early general election and protracted instability that had appalled voters and markets alike.
Markets appeared relieved at the result on Monday and the debt-ridden country's cost of borrowing dipped by about 0.7 percentage points, after soaring on Prime Minister George Papandreou's threat to dissolve Parliament in the case of a heavy defeat.
Instead, Sunday's first round of voting gave the Socialists outright victory in two of the 13 regional gubernatorial races, and put them ahead in five others. A runoff vote will be held next Sunday for the 11 undecided regions, as well as most of the country's 325 municipalities.
Analyst Vangelis Agapitos said the result showed voter tolerance for Papandreou's 13-month old government, despite harsh cutbacks, soaring unemployment and a shrinking economy.
"They're not happy with (the situation) but they also realize that Greece is a very sick country at the moment," Agapitos said. "As a result, (Papandreou) has the people's approval to continue with the very harsh measures, and we all hope that these measures will start to take effect and also that he starts focusing on growth _ because you can only cut so much."
After years of overspending and borrowing beyond its means, Greece narrowly avoided bankruptcy in May after its European partners and the International Monetary Fund agreed on a (EURO)130 billion ($180 billion) emergency loan package through 2013.
In return, Papandreou's Socialists cut pensions and salaries, while hiking taxes and pledging to cut down on widespread waste, corruption and tax evasion. While spending cuts steadily exceed target so far, tax receipts remain largely disappointing.
Sunday's vote cost the Socialists most of their crushing, 10-point lead over the conservatives from last October's national elections. But the record low turnout _ about 60 percent even though voting is compulsory _ pointed to little voter enthusiasm for either of the main parties that have governed Greece, off and on, for the past 36 years.
In Athens, turnout fell to about 40 percent.
"The refusal of almost half the electorate to even turn up at polling stations is a warning to our entire political system," pro-government Ta Nea daily said in an editorial.
Left-leaning Eleftherotypia said the country's main gain had been the avoidance of early elections.
"The electorate showed disapproval for the government, without boosting its main conservative opponent," an editorial said. "Voters kept the Socialists ahead, albeit wounded, and did not give the prime minister a pretext to call early elections in the midst of the economic crisis."
Papandreou had threatened to call elections if Sunday's vote failed to show popular support for his austerity measures, after opposition parties billed the local polls as a vote of confidence in the cutbacks.
An opinion poll Sunday showed that the austerity program would affect the way about one in two Greeks voted, while some 65 percent believed that the cutbacks were not the only way to salvation. But 81 percent of respondents also said that there was no need for early elections.
The Public Issue poll for Skai TV gave a 3.2 percent margin of error.
The uncertainty had made markets jittery, sending the interest-rate gap, or spread, between Greek 10-year bonds and Germany's benchmark equivalent to way above 9 percentage points on Friday.
The spreads narrowed after Papandreou's late-night speech backing away from an early election, falling to about 8.8 percentage points before creeping up again to just above 9. The Athens stock exchange reaction was also positive, with the general price index up 1.4 percent in late afternoon trading after bullish morning action.
However, rates demanded for Greek bonds are still too high for Greece to contemplate tapping the market to finance its massive debt. The government has said it hopes to able to do so some time next year.
____
Associated Press writer Elena Becatoros and APTN producer Nathalie Rendevski-Savaricas in Athens contributed to this report.


Updated : 2021-10-17 23:36 GMT+08:00