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Greece's prime minister has warned the financially-stricken nation may be forced out of the eurozone if January's parliamentary election hands hard-left party Syriza power to reverse years of austerity measures.
"This struggle will determine whether Greece stays in Europe," Antonis Samaras said yesterday, as he asked the outgoing president to dissolve parliament ahead of an election set for January 25.
Fears of a potential Greek exit have already rattled markets and sparked concern throughout European Union capitals.
Syriza has pledged to reverse reforms imposed by Greece's creditors - the so-called "troika" of the International Monetary Fund, European Commission, and European Central Bank - cut taxes, and increase state aid and public services.
Polls indicate Syriza leads Samaras' conservative New Democracy party by three to six points.
The January election was called Monday after lawmakers failed in a third attempt to elect a successor to 85-year-old President Karolos Papoulias, whose five-year term ends in March.
The last election plunged Greece into weeks of political uncertainty, and there are fears of a repeat next month given the close race between Samaras' New Democracy conservatives and front-running Syriza.
"In an unprecedented twist, the new parliament could elect a president and be dissolved again for new elections (immediately afterwards) if a government cannot be formed," the Kathimerini daily wrote yesterday.
If Syriza were to win they would still need to form a coalition and tone down some of their rhetoric to find a partner, according to Manos Papazoglou, a professor of political science at the University of the Peloponnese.
"Syriza will have to move towards the centre," Papazoglou told AFP.
It also remained unclear who the prospective coalition allies would be, as a handful of small parties are vying for parliament.
These include the recently-formed centrist party To Potami (The River), led by a former journalist. There are also rumours that former prime minister George Papandreou is about to form a party.
Greek stocks closed down almost 4% on Monday - having lost a massive 11% earlier - amid fears that Syriza would roll back austerity measures if it wins the election.
The stock market appeared though to have digested the news by yesterday, closing down just 0.45%.
Syriza had dismissed warnings that its electoral programme would rattle markets and creditors, but within hours of the election being called on Monday, the International Monetary Fund said it was suspending further bailout payments to Greece until a new government was formed.
