The pressure to compromise will be intense. Under the bailout program’s rigorous schedule, Greece is required to complete a review of its progress with the so-called troika of bailout inspectors by the end of February. Mr. Tsipras has said he doesn’t recognize the troika’s authority.
If negotiations to revive the bailout falter, Greece would be without an umbrella of protection. That program ensures that Greece’s government has access to a stream of cheap financing, and ensures Greek banks have access to cheap funding from the European Central Bank.
The next hurdle will be €7 billion in bonds held by the ECB that mature in July and August. Greece doesn’t have the cash to repay them, and failure to do so could ultimately lead to Greece’s exit from the eurozone.
The country is already deeply strained. In the past three months, Greece’s main stock index has shed roughly a fifth of its value, while nervous depositors have withdrawn several billion euros from the country’s banking system.
At the same time, the rest of Europe is financially healthier—even as it is mired in economic stagnation. The ECB’s newly announced program of government-bond purchases, while primarily designed to boost sagging inflation, will likely “muffle any contagion effects” by damping financial-market volatility, said Lucy O’Carroll, chief economist at Aberdeen Asset Management.
After midnight local time, with more than 98% of the ballots counted, Syriza had 36.3% of the vote, trouncing the incumbent New Democracy party, with just 27.8%. The polls also showed voters backed a handful of smaller parties—including the extreme-right Golden Dawn party and the centrist To Potami party.
But in the early hours of Monday, even before the final votes were counted, Syriza officials said a deal had been struck with the Independent Greeks—a party that shares little common ground with Syriza except for its rejection of the austerity measures. The party, which is poised to win 13 seats in Parliament, would mean the coalition would have at least 162 seats—a comfortable governing majority in Greece’s 300-seat legislature.
A meeting between Mr. Tsipras and Independent Greeks party leader Panos Kammenos is scheduled to take place Monday morning, Syriza officials said.
Since first seeking a bailout in 2010, Greece has undertaken broad economic overhauls and cutbacks that have helped mend its public finances and nudged the economy back to growth following six years of deep recession. Those cutbacks have come at a cost: Some 25% of Greeks remain jobless, while a quarter of households live close to the poverty line.
Syriza has promised to change all of that, pledging immediate relief to the poor, rolling back unpopular taxes and negotiating a debt write-down with the country’s creditors to free up spending on social programs.
