ATHENS (Reuters) – Greece formally dissolved parliament on Wednesday ahead of a general election on January 25 that has cast its international bailout into doubt and set financial markets on edge just as the euro zone grapples with renewed signs of weakness.
The traditional decree calling new elections was posted on the door to parliament two days after lawmakers rejected Prime Minister Antonis Samaras’ candidate for president, automatically triggering a return to the polls.
The January 25 vote will mark a showdown between Samaras’ conservative New Democracy party, which imposed unpopular budget cuts under Greece’s bailout deal, and the leftwing Syriza party of Alexis Tsipras, who wants to cancel austerity measures along with a chunk of Greek debt. Opinion polls show Syriza holding a lead over New Democracy, although its margin has narrowed to about three percentage points in the run-up to the vote.
However, weakness among the small parties that either Syriza or New Democracy would need to form a stable coalition has also added to the uncertainty and raised the possibility that the next government may not survive long.
Tsipras, who says he wants to keep Greece in the euro, has sought to present a more moderate face to financial markets and reassure voters that a Syriza-led government would not raid their bank accounts.
But the potential arrival of a government open-ly opposed to the international bailout keeping Athens from bankruptcy has fuelled a nervy mood on financial markets, even if the impact has been more limited than in past crises.