Syriza heads for victory in Greek election as Tsipras prevails

New Democracy leader Evangelos Meimarakis, 61, acknowledged Tsipras's victory and conceded defeat on Sunday

Alexis Tsipras looks set to return to power in Greece as his Syriza party headed for a second election victory in eight months even after he failed to defy European leaders over more austerity measures.

The 41-year-old former prime minister's Coalition of the Radical Left was leading New Democracy by 35 per cent to 28 per cent with a fifth of votes counted. New Democracy leader Evangelos Meimarakis, 61, acknowledged Tsipras's victory, as Mega TV predicted Syriza would get as many as 145 seats in the 300-member Greek Parliament.

Meimarakis conceded defeat on Sunday in Greece's national election to his leftist rival, Syriza's Tsipras.

Meimarakis said the priority for the country was to form a government. "The electoral result appears to be concluding with Syriza and Tspiras in the lead," Meimarakis told journalists. "I congratulate him and urge him to create the government which is needed and come to parliament."

If confirmed, what will follow is a period of negotiations with smaller parties before the makeup of the next government becomes clear. Unlike in the January vote that swept Syriza to power on a promise to restore dignity to a nation in economic crisis, any new coalition has little room to maneuver after Tsipras caved to the demands of creditors for more spending cuts and tax increases in exchange for aid.

"The bigger question is whether the incoming government will be able to successfully conclude the bailout's first review," Mujtaba Rahman, an analyst at Eurasia Group, said by e- mail. "That is what economic and political stability will depend upon."

Third package

That international appraisal of Greece's reform efforts is due before the end of the year, and a positive verdict will be necessary to start accessing the country's new Euro 86 billion ($97 billion) bailout, its third rescue package since 2010. Of particular importance will be the disbursement of funds to recapitalise Greek banks, which have been battered by deposit outflows that prompted capital controls.

The vote was Greece's sixth national ballot since 2009, including July's surprise referendum on austerity measures called by Tsipras as he upped the stakes in talks with the euro region.

Both Syriza and New Democracy said in the campaign that they would not challenge the bailout agreement and would push to implement its terms, though a number of smaller parties didn't share that view. Investors have nonetheless signaled confidence in recent weeks that the worst is over for Greece, with government bonds posting the biggest returns in the euro zone over the past month, and the Athens stock market also rallying.

In early returns, the centre-left Pasok, which governed in a coalition with New Democracy until January, was set for 6.5 per cent. Independent Greeks, the junior coalition partner in Tsipras's last government, got 3.7 per cent, exceeding the threshold to enter parliament. Another party, the centrist To Potami, or The River, was on 3.8 per cent.

U-turn

Tsipras struck the deal with creditors in July despite the emphatic decision by Greeks to vote "no" to further austerity measures in the referendum. The agreement came amid threats to expel Greece from the euro if it continued to reject creditors' demands and was a major about-face for Tsipras.

A subsequent split in Syriza led to Tsipras's resignation as prime minister in August, triggering the election. Syriza lawmakers who revolted against the bailout agreement formed a new party, Popular Unity, to advocate a return to the drachma. Popular Unity took 2.8 per cent of the early count, below the threshold to enter parliament.

If no party can form a viable coalition, the country could be sent back to the polls yet again by President Prokopis Pavlopoulos, in the hopes of delivering a clearer verdict.