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Thomas Molloy: Greeks and Germans must overcome years of mistrust

THE Greeks have spoken but what did they say? The pro-bailout New Democracy party came in first yesterday in Greece's national election and could gather enough support to form a pro-bailout coalition to keep the country in the eurozone but most analysts expect the process of building a new government to take a few days.

Greece held regular elections when the rest of Europe lived in caves but no Greek vote has been watched with as much trepidation as yesterday's vote because no previous Greek election has had the power to cause so much harm at home and abroad.

Early returns last night showed Greece's centre-right New Democracy party edging ahead of Syriza, its radical leftist opponents. As European leaders and financiers woke up this morning, they at least knew that most of them had followed the old adage by hoping for the best and preparing for the worst.

Officials from the G20 nations, whose leaders are meeting in Mexico today and tomorrow, stand ready to take action as the unforgiving markets open and digest yesterday's result.

The Greeks themselves were also preparing for the worst as the clock counted down to yesterday's vote.

The Athens stock exchange peaked on rumours that the established parties were in the lead but money poured out of Greece last week as the country's anxious citizens withdrew €800m a day from the banks to stock up with basic food supplies and shift spare cash overseas.

Greeks and foreign companies operating in the country who can't move overseas did their best to protect their assets instead. British electrical retailer Dixons has spent the last few weeks stockpiling security shutters to protect their 98 shops across Greece in case of riots.

The UK chain, which owns the biggest Greek electrical retailer, is using experience from last summer's London riots to avoid becoming a target for looters who like the sort of big flat-screen televisions and iPads sold by the chain. Another UK company, Vodafone, which got stung during recent riots in Egypt, has made plans to protect its buildings while travel giant TUI, which owns Thomas Cook, is on stand-by to fly holidaymakers to other destinations if violence becomes a major problem.

Europe is perilously close to what the markets call capitulation; the moment when the herd suddenly decides that it does not want shares, bonds or currencies regardless of the cost of dumping them. Capitulation doesn't happen often but it is a white knuckle ride when it does.

One of the reasons why all this anxiety is well-founded is that there can be no good result from yesterday's vote, only the lesser of several evils.

The election of Antonis Samaras and his conservative New Democracy party or Pasok leader Evangelos Venizelos means a return to the sort of circus which has driven the rest of the Continent to distraction for years. There is nothing reassuring about the return of a Greek establishment which has run the country into the ground since the generals ceded power in the 1970s.

It is often forgotten that all three mainstream parties that now seem to have a majority went into the elections committed to renegotiating the austerity package. There is no party in Greece today that believes the country can continue as it has done despite two bailouts and a default.

The question now is what will be the response from northern Europe. Many suspect that Germany, Austria, Finland and the Netherlands want Greece to leave along with a few other countries to create a smaller, more coherent single currency.

Others believe that Germany has been slow to react to the crisis but will still fulfil its post-war destiny by acting as the financial cavalry and come galloping over the hill at the last moment to save the day.

Yesterday's elections will go a long way to revealing Angela Merkel's intentions. The inscrutable chancellor must now either step in and save Greece or let the country go. No possible government resulting from yesterday's elections expects anything else.

With Spain in trouble and the spectre of a bailout hovering over Italy, the crisis has shifted from the Aegean to the Mediterranean and the Atlantic.

The Greeks do not appear to understand this yet and may be tempted to overplay their hand in the days ahead.

The question the whole world is waiting to know is whether the Greeks and Germans can overcome years of mistrust and reach a convincing deal.

We will know in a few days what the Greek election means for the future of Greece and Europe but things are moving so quickly these days that we could also know by teatime.

Irish Independent