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Greece’s Respite Met With Cautious Optimism

June 18, 2012 at 12:00 AM EST
World leaders reacted with cautious optimism after the pro-bailout party in Greece won Sunday's elections. Jeffrey Brown reports on Europe's new obstacles as it attempts to achieve financial security.
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JEFFREY BROWN: Europe cleared a major hurdle Sunday, as voters in Greece decided to stick with their bailout. But, today, new obstacles loomed on the road to the continent’s financial security.

From newsstands in Athens, to the G20 summit at a Mexican resort, to financial markets, the election results from Greece were felt worldwide. Political parties who support staying in the European currency union and accepting the international bailout of Greece managed to win a majority in parliament on Sunday.

Antonis Samaras and his conservative New Democracy Party led the field with nearly 30 percent of the vote. He set to work today on forming a governing coalition likely with the Socialist Party.

ANTONIS SAMARAS, New Democracy Party Leader: I believe that a government should immediately be formed. It’s something that is required and necessitated by the developments, by the economic situation, by the reality and by the vote of the Greek people.

JEFFREY BROWN: Samaras said again he wants to renegotiate some of the austerity measures required under terms of the bailout. But German Chancellor Angela Merkel rejected that idea, saying Athens must keep the commitments it already made.

ANGELA MERKEL, German Chancellor (through translator): We signed a program for Greece, and the framework for this program must be maintained. This means that we must ensure that Greece sticks to its obligations.

JEFFREY BROWN: In Washington, Donald Kohn, a former vice chair of the Federal Reserve now at the Brookings Institution, said changing the bailout terms is fraught with difficulty.

DONALD KOHN, Former Vice Chair, U.S. Federal Reserve: The people giving the aid will not want to let up on the very fundamental reforms that they see are necessary, both in the government affairs and in the structure of the Greek market system. And — but, at the same time, the Greeks will want at a minimum more time to work this through.

JEFFREY BROWN: European markets initially surged as fears eased that Greece would leave the Eurozone, touching off potential financial chaos, but then Spain’s cost of borrowing funds surged again, reminding investors of just how far Europe is from broad financial stability.

Those same concerns occupied world leaders meeting at the G20 summit in Los Cabos, Mexico. European officials voiced cautious optimism about Greece and the Eurozone ultimately working through their problems.

JOSE MANUEL BARROSO, President, European Commission: The new government needs to get to work quickly to implement the economic reforms which are needed to bring Greece back on its feet again.

HERMAN VAN ROMPUY, European Union President: This crisis in the Eurozone will take time to solve. There are no quick fixes, nor silver bullets. But we will do all it takes to see it through.

JEFFREY BROWN: President Obama sounded a similar note as he met with Mexican President Felipe Calderon.

BARACK OBAMA, President of the United States: I think the election in Greece yesterday indicates a positive prospect for not only them forming a government, but also them working constructively with their international partners.

JEFFREY BROWN: But among the Greek people today, expectations were muted at best.

PANOS GIANNAKOPOULOS, Greece (through translator): With regards to workers and small business owners, we won’t see any immediate or radical changes. There will be a long time coming and whatever happens it will happen slowly. We just got momentary relief.

KOSTAS TSIKRIKAS, Greece (through translator): There’s a small hope from the statements made by parties that might participate in a coalition government that they will try to renegotiate the bailout terms. This creates some hope that there will be some relief for both private sector and public sector workers in our country.

JEFFREY BROWN: Talks to form a coalition government in Greece will continue tomorrow.