Open thread: The Greek elections; Update: Coalition may be in chaos

The elections in Greece have come to a halt and now we’re just waiting for them to finish tallying the results. Antonis Samaras with the New Democracy party is generally regarded as the last best hope that Greece will find a way to honor their obligations and stave off complete and utter disaster. His rival, Alexis Tsipras of the SYRIZA party, is the openly acknowledged leftist who is more interested in keeping everyone on the gravy train and – at least in the opinion of some – driving Greece away from the Euro, potentially out of the EU, and sinking the country once and for all. This could set into effect a string of dominoes falling which could easily cross the Atlantic and hit the United States with the residual shrapnel.

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Early exit polling is already coming in. There are regular updates being posted at Business Insider by Joe Weisenthal, who is over in Greece right now covering the action live. Here’s the link for those.

The first polls are out and it’s insanely close.

The conservative, pro-bailout New Democracy party is leading by just 0.5% over the left-wing SYRIZA party according to exit polls published by Greek media.

There’s no guarantee that these polls will resemble the final night, but this is TIGHT, and the world is now on edge.

We’ll update this later as more solid numbers come in, but you can all bat it around until then. Here’s hoping for a positive outcome.

Update (Allahpundit): Crucially important to note: Syriza doesn’t need a clear majority to win and yank Greece out of the eurozone. From the Guardian:

Any one party would need 36-38% of the vote to form a workable majority. Ordinarily this would be 51% but a bonus 50 seats will given to the party in the lead, bringing the percentage down.

I was wondering this morning why people were hyperventilating simply because the exit polls between Syriza and New Democracy were so close. What would it matter given that either one will be well short of a majority and heavily dependent upon the smaller parties to join them in a coalition? Answer: That 50-seat bonus. Whichever party wins the vote, even if it’s 28.1 percent to 28 percent, will get a huge windfall of extra seats and will start with something close to a majority in parliament. They’re not so heavily dependent upon the smaller parties after all.

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Update (Allahpundit): Yikes.

Skai TV gives first seat projections from their exit polls: Syriza 28% 124 seats, ND, 27.5% 73 seats, Pasok 13% 33 seats.

Update (Allahpundit): Weisenthal says ND might pull it out after all:

The latest wave of exit polls show New Democracy expanding its tiny lead of the left-wing SYRIZA coalition.

Whereas in the first exit poll that came out at 12:00 ET (7:00 PM Athens time) showed a 0.5% lead for New Democracy, this second poll shows a lead of about 1%… a very good sign that they’re expanding.

Greek TV network NET is calling for about 159 combined seats between New Democracy and PASOK.

UPDATE (Jazz): More confirmation coming in that the traditional parties may be able to shut out the left-wing uprising.

ATHENS, Greece (AP) – Exit polls: Greece’s 2 traditional parties have enough seats to form pro-euro coalition.

Update (Allahpundit): What would a Syriza win followed by a hasty eurozone exit look like? In a worst-case scenario, a new global financial crisis:

If Greece dropped the euro, traders would become more suspicious of Spain, Portugal and Italy and sell those countries’ government bonds, pushing their prices down and driving their interest rates up.

Higher borrowing costs squeeze those countries’ budgets and push them deeper into debt. Plunging bond prices also would imperil Europe’s troubled banks. The banks are big holders of government bonds, which they bought when the bonds were considered safe.

At this point, the risk would be high for a run on banks throughout Europe. People would worry that the banks might fail and would rush to withdraw what they could. Analysts and investors say that’s the biggest fear…

From here, the crisis could get much worse: Banks could fail, the surviving banks could stop lending to each other, and a credit freeze could shut down commerce in Europe as assuredly as a blizzard did last winter.

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Needless to say, if a total meltdown in Europe is inevitable, Team O much prefers that it happen after November. Lots of New Democracy fans in the White House and at Chicago HQ today.

Update (Allahpundit): Two interesting pieces this morning on a key irony of the Greek election, that for once it’s a radical left party (i.e. Syriza) that represents federalism and popular sovereignty. Read Ross Douthat on that, then Janet Daley at the Telegraph. There are only two paths out of the eurozone’s conundrum: Greater political integration allowing a central body to dictate terms to reluctant electorates like Greece’s, or a lot, lot, lot more fiscal responsibility to ensure that this problem doesn’t recur. Daley:

[T]he only way that the World Economy, which has now become an apolitical, undemocratic, supra-national force of nature, could be brought under control is to erase the divisive historical memory of nations and create an equal and opposite force of World Government. This, of course, is just what the EU was designed to do on a continental scale, and that hasn’t quite worked out. The official solution – endlessly reiterated by increasingly desperate European commissars – is to eradicate more forcibly than ever the messy democratic accountability of national governments to their people…

A really serious cutback in state spending – not the Osborne nibble but drastic, meaningful reductions in the size of government – could reduce the dependence of democracies on global capital. It is government entitlement programmes which devour wealth and produce nothing in return. If they were stripped away – and if government got out of the wealth redistribution business – taxation could be reduced. So instead of “stimulating” the economy by offering more debt (as Mr Osborne proposed at the Mansion House), and so getting even deeper into hock to the Beast, we might get the genuine stimulus that comes from people spending money that they have earned.

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Update (Allahpundit): Another wrinkle of this election is that, if you believe the polls, upwards of 80 percent of Greeks want to remain in the eurozone yet heavy majorities also oppose the austerity conditions that Germany demands for membership. The new government, even if led by New Democracy, probably has no choice but to try to renegotiate the terms of the bailout with Germany. What if Merkel says no?

Update (Allahpundit): If Berlin and Washington were banking on a New Democracy/Pasok coalition to preserve the bailout, it might be time for plan B:

Up until 30 minutes or so ago, it looked like the election would end up very close, but that New Democracy would win and then form a government alongside third-place PASOK. Between the two parties, they’d have 159 seats, enough to gain a majrotiy in the 151 seat Hellenic parliament.

But ereports have come out — and we have confirmed as well with a PASOK source — that PASOK may not be willing to join the government unless the leftists of SYRIZA also joined and formed a government of national unity…

It’s a dramatic gambit that threatens more chaos, and perhaps another election.

That’s from Weisenthal, who sees this as a tactical move. Since the rest of this year is bound to be miserable for Greece, a New Democracy/Pasok coalition will get all the blame and then Syriza will win in a landslide in the next election. By insisting that Syriza be included in the government, Pasok’s ensuring that their new left-wing rivals will take some blame too.

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What now?

Update (Allahpundit): James Pethokoukis on what lies ahead. Spoiler alert: An exit from the eurozone, but with a bit more time for banks around the world to prepare for the earthquake.

Update (Jazz): From Weisenthal

New Democracy leader Antonio Samaras just gave his “victory” speech, saying that Greeks have voted for growth, and to stay in the Euro.

It was a very short speech delivered in both Greek and English.

Update (Jazz):Yet another Update from Joe. This is getting worse, not better.

UPDATE 4:30 PM ET/11:30 ATHENS

If you thought for a moment that the Greek election would end in a clean outcome tonight, the joke was on you.

In the first wave of exit polls that came out at 12:00 PM ET, the pro-bailout, conservative New Democracy party held a razor thin 0.5% lead over the leftist SYRIZA party.

Then an hour and a half later, it became clear that New Democracy would come in first, and that it (along with PASOK) would have enough seats to garner a majority in the Hellenic Parliament.

This is the outcome that markets have most wanted to see, as New Democracy and PASOK have generally signalled a willingness to go along with the current bailout path, and not buck the rest of Europe. The leftist leader Alex Tsipras, on the other hand, had threatened to tear up the bailout agreement (though he had always promised not to leave the Eurozone).

So at first it all seemed good… but then around 9:00 PM in Athens, word came that the leader of PASOK, Venizelos, was threatening to withhold support for a new government unless SYRIZA also joined as part of a broad coalition.

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