Greek Socialists win local elections as debt concerns escalate

Nov 15, 2010, 7:34 GMT

Athens - Greece's governing Socialists won local elections on Monday, hours before the European Union was expected to announce an upward revision in the country's deficit figures.

Nearly a year after Prime Minister George Papandreou's Socialists won a landslide victory in national elections, the party won mayoral races in Athens and Greece's second largest city, Thessaloniki, for the first time in 24 years.

The governing Socialists also won eight out of 13 regional governor posts, despite a record low voter turnout in Sunday's runoffs and a first round of voting on November 7.

Voter turnout in Athens was 33 per cent, rising to 50 per cent nationally.

Greek Prime Minister George Papandreou promised his government would serve out its four-year term, saying the strong support that voters had given his party was a clear indication of public backing for a wave of austerity measures designed to pull Greece out of massive debt.

'Today the nation has indicated for us to proceed with our course,' Papandreou said.

The Mediterranean country has faced months of strikes as it plunged into recession, with rising unemployment and the closure of thousands of small businesses.

The government is required to slash spending and restructure large parts of the economy in exchange for a 110-billion-euro (150-billion- dollar) rescue plan funded by the International Monetary Fund (IMF) and the EU.

The Socialists' parliamentary majority has approved measures such as wage and pension cuts and consumer tax increases in exchange for the bailout package.

Local elections were held just as Athens may be forced to commit to further cuts - the EU is on Monday expected to revise the country's 2009 deficit upward to 15.5 per cent of gross domestic product from the current projection of 13.6 per cent.

Inspectors from the EU and IMF are due in Athens Monday to take another look at the cost-cutting measures.

Papandreou said in a newspaper interview that Greece could be forced to seek an extension for the repayment of the emergency loan and admitted that the deficit revision would put pressure on his government to make additional cuts.

'It is like running a marathon and discovering during the course of the race that more kilometres have been added,' he told the Proto Thema newspaper.

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