Greek Socialist leader Evangelos Venizelos, leader of the runner-up Pasok party in Sunday’s parliamentary elections, has called for a national unity government of all pro-bailout parties, but warned that forming such a coalition would be difficult.
In his first public comments since polls closed, Venizelos said his party had paid the price for handling the country's sovereign debt crisis.
With 25% of the votes counted, the pro-bailout unholy alliance with the conservative New Democracy has been struggling to reach the 151-seat threshold in the 300-seat assembly in order to continue with EU and IMF-imposed reforms.
"For us in PASOK this day is extremely painful," he said. "We knew the price would be big but we decided to pay it. We embittered people to protect the nation's future.
"The possibility of a national unity government must be explored."
Unofficial results from the interior ministry show Pasok beaten into third place behind the conservative New Democracy and the anti-bailout Left Coalition (Syriza).
"It is incredible that you have no party getting above 20%. This is really unprecedented,” said Othon Anastasakis, Director of Southeast European Studies at Oxford University.
"The whole landscape becomes even more unpredictable after the election. We don't know if there will be a coalition or how long it will survive. I don't see it surviving very long,” Anastasakis added.
"Greeks are sending a very strong message abroad, which is enough with austerity."
"Although the two main parties might be able to get a majority at the end, the bigger story is more important: it's an anti-Merkel vote,” explained Riccardo Designori, financial analyst at Brown Editore in Milan.
"People across Europe are fed up with tough austerity measures imposed by German policymakers, and this could be a turning point. The impact on European stocks could be limited, however, as the market has been steeply falling for six weeks, so a lot has been priced in already."
"The risk is that foreign investors turn very cautious again over the euro zone, and they might decide to simply get out and wait to see how things develop, and this would be negative for European markets," added Philippe Waechter, head of economic research at Natixis Asset Management, Paris.
"Voters punished the two big parties over austerity and supported instead the two anti-bailout ones, the Left Coalition and the Independent Greeks. It was a surprise how well these two parties fared,” said Theodore Couloumbis, political analyst for the Athens-based think-tank Eliamep.
"They will be able to form a government only if they get the support of a third party, a milder one, like the Democratic Left for example."
However, another financial analyst gave a bleak picture,
"Overall, these are very disappointing results, although not surprising. The bigger story here is that this shows that politics is getting out of control in Europe, the gap between politicians and voters is widening, that's what you see in Greece, that's what you see in France,” said Steen Jakobsen, chief economist at Saxo Bank, Copenhagen.
"Clearly, voters across Europe have started to send the message: 'we are not ready to do the reforms', and that's worrying. We are on the brink of a major crisis in Europe, economically and socially."
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