ATHENS – A day after declaring the death of austerity, Greece’s victorious radical left moved quickly Monday to form a government even as financial markets wobbled and establishment politicians across Europe cast doubt on any attempt to renegotiate the country’s vast debt.
Alexis Tsipras, the charismatic 40-year-old leader of the Syriza party, was sworn in as Greece’s youngest prime minister in 150 years after a convincing and historic win in Sunday elections that sent both hopes and jitters rippling across the continent and beyond.
Syriza fell just short of the threshold for a majority in the 300-seat Parliament, forcing a coalition deal with a small right-wing party, the Independent Greeks.
The two have virtually nothing in common beyond their shared antipathy for the stringent terms of the country’s $284 billion bailouts, which saved Greece from fiscal ruin but imposed strict measures to rein in spending.
Tsipras has vowed to renegotiate those agreements with Greece’s international creditors and says he will demand they cancel at least half the country’s debt.
But Greece’s German-dominated paymasters are considered unlikely to give Syriza what it wants. Analysts and investors fear a showdown that could end with an unintended Greek exit from the euro — a development that could put the entire currency union at risk.
The Athens stock exchange fell 5 percent in early trading Monday before bouncing back on news of the coalition agreement. Yields on Greek 10-year-bonds edged up toward 9 percent, suggesting rising investor apprehension.
Elsewhere in Europe, however, markets were relatively steady, shrugging off a Syriza win that had been widely forecast.
Reactions from political leaders across Europe reflected the continent’s increasingly polarized politics.
Syriza’s win was celebrated as a milestone by ideological compatriots in Spain, Italy and Portugal, who are trying to widen the anti-austerity march beyond Greece and take it across the entirety of debt-ridden southern Europe.
Center-left politicians, such as French President François Hollande, also welcomed Syriza’s victory.
But in northern European nations such as Germany and Britain, there was horror that Greek voters had delivered such a dramatic rebuke to the principles of austerity when it remains so deeply in debt.
Germany’s largest newspaper, Bild, proclaimed “Greeks vote for the Euro-fright,” and urged their country’s leadership to hold firm in any talks. “An agreement is an agreement,” the paper declared.
Britain’s chancellor of the exchequer, deficit hawk George Osborne, called Syriza’s promises “very difficult to deliver and incompatible with what the eurozone currently demands of its members.”
Osborne’s comments came just hours after thousands of Syriza supporters cheered in the streets of Athens on Sunday night following the final vote count.
“The verdict of the Greek people ends, beyond any doubt, the vicious circle of austerity in our country,” Tsipras told a crowd just before midnight at the marble-columned Athens Academy. “The verdict of the Greek people, your verdict, annuls today in an indisputable fashion the bailout agreements of austerity and disaster.”
A return of the euro-zone fiscal crisis could rattle markets worldwide. In Washington, a White House statement said Greeks “have taken many difficult but important steps to lay the groundwork for economic recovery.”
Tsipras had campaigned on an upbeat if improbable platform of reviving the country’s beaten-down economy by turning on the taps of government stimulus. He vowed to hire back laid-off workers, raise the minimum wage, expand access to health insurance and provide electricity to those who can no longer afford it.
Those pledges resonated powerfully in a nation where a third of the population lives at or below the poverty line, following years of cuts and recession. But the election of the first radical leftist government in the history of the European Union represents a provocative challenge to the international creditors who bailed out Greece on the condition that the country rein in its bloated costs.
“The whole idea of the euro is its irrevocability, and the moment you break that, you have no euro anymore,” said George Pagoulatos, a professor at the Athens University of Economics and a former government adviser. “This is a path down which no one wants to go.”
Even as the votes were being counted Sunday night, German officials dismissed the idea of any wholesale renegotiation.
Central bank President Jens Weidmann told state broadcaster ARD that Greece needs to stick to its commitments. “I hope the new government won’t call into question what is expected,” he said.
And yet Greek voters appeared ready to risk a clash. With the economy in tatters, Greece has little to lose, they said, by gambling on a party promising radical change.
“The way things are right now, it’s impossible to survive,” said Helen Zorba, a 55-year-old civil servant who said her pay has been cut by 20 percent in recent years while her taxes have gone up. “People are losing their dignity. You shouldn’t have to go to the soup kitchen in order to live.”
Zorba proudly sported a colorful Syriza sticker on her denim jacket after casting her ballot in the working-class suburb of Nikea. She has backed the party for years, she said, even when it was barely pulling in 3 percent of the vote.
As the public’s desperation has risen, so has Syriza’s popularity, with middle-class voters abandoning the centrist parties that have dominated Greek politics for decades and casting their lot with a group dominated by Marxist university professors and Communist activists.
“People say Syriza doesn’t have the experience to govern. But the people who have the experience and the know-how to govern are the ones who failed Greece,” Zorba said.
Official results released Sunday evening showed Syriza had comfortably defeated its nearest rival, securing 36 percent of the vote compared with 28 percent for the incumbent center-right New Democracy party. Because the top party gets an additional 50 seats in the country’s Parliament, Syriza took 149 seats — two short of a majority.
The third-place party, with 6 percent of the vote, was the neo-fascist Golden Dawn. Syriza’s coalition partner, the Independent Greeks, finished sixth.
Sunday’s vote was Greece’s third since 2012, and it came after the current government lost what amounted to a no-confidence measure in December.
Syriza leaders have been adamant that they do not intend to take Greece back to its pre-2001 currency, the drachma. But they have also said there is no backup plan if European negotiators refuse to budge in canceling Greek debt.
“It’s a game of chicken,” said Pagoulatos, the economist, in which “no one intends to crash.”
