Markets plunge in Greece as third failure to elect a president triggers general election

The Greek parliament failed to elect a president stoking financial market fears

(Getty)

Greece will face a snap general election next month after MPs failed to elect a president in the final round of voting today, prompting alarm in Athens’ financial market and the eurozone as doubt was cast on the country’s commitment to its bailout terms.

Prime Minister Antonis Samaras said that the parliamentary elections will take place on 25 January 2015.

The prospect of elections in the country, which is still suffering from severe austerity measures, is leading many investors to sell government bonds, causing panic in financial circles.

Stavros Dimas, the coalition government’s candidate for president, received 168 votes out of 300 – just short of the 180 needed to confirm him in the post.

“We did everything in our power for parliament to elect a president and avoid early elections which are surrounded by serious dangers,” the Prime Minister, Antonis Samaras, said after the vote. The conservative leader said he would seek a general election on 25 January. “There is no time to waste,” he said.

As the news broke, markets in Greece fell by 11 per cent, although they later closed down 3.9 per cent, stoked by prospects of fresh political instability and expectations of a left-wing win at the election. Recent opinion polls have consistently shown that the left-wing opposition party Syriza is on track to win an upcoming election.

The party has been a fierce critic of the bailout deal Greece secured to ensure that it did not default on its debt. Syriza has pledged to reverse some of the reforms implemented by the current government.

Mr Samaras had said that elections could prove “disastrous” at a time when Greece is negotiating with its creditors.

Following a six-year recession and a slew of spending cuts, the Greek economy has recently seen growth, but with a quarter of the country’s GDP wiped out in just a few years, the marks of austerity are still visible.

Greece has borrowed more than €240bn from the EU and IMF, which have in turn imposed harsh measures and reforms. European officials have recently praised Athens for its fiscal adjustment efforts and fear that having Syriza in power could be a setback.

Mr Dimas was optimistic and noted that a majority of parliamentary members were in favour of his candidacy.

“I think I expected the result. I remain calm as ever,” he said, after expressing his support for the rescue of people on the Greek ferry that is stranded in the Adriatic Sea.