Greece turns to Socialists to fight economic crisis

GREECE'S Socialists were celebrating today after storming to a landslide victory in the country's snap general election.

The outgoing prime minister, Costas Karamanlis, congratulated George Papandreou, leader of the Panhellenic Socialist Movement (Pasok), and resigned as leader of the conservative New Democracy party.

With most ballots counted, Pasok - which had been in opposition for more than five years - had more than 43 per cent of the vote, enough for an absolute majority. New Democracy had 35 per cent.

The result gives Pasok 160 seats in the 300-member parliament. mr Papandreou, 57, told cheering supporters in Athens: "We stand here united before the great responsibility which we undertake."

The campaign was fought almost exclusively on economic issues as the parties offered dramatically different visions of how to dig the country out of its worst financial crisis in years.

Widespread anger over repeated scandals had already whittled away support for Mr Karamanlis's government.

Mr Papandreou, a 57-year-old former foreign minister whose father and grandfather were both prime ministers, claimed that Mr Karamanlis's austerity plans for tackling the international financial crisis were wrong. He offered a more optimistic solution, saying he would inject up to €3 billion to reinvigorate the Greek economy.

Mr Papandreou's victory and a recent election win by socialists in Portugal buck a European trend that has seen a conservative surge in the continent's main economies.

Mr Papandreou warned Greeks they faced tough times. He said: "Nothing is going to be easy. It will take a lot of hard work. I will always be upfront with the Greek people so we can solve the country's problems together."

He has pledged to limit borrowing by reducing government waste and chasing tax dodgers. Greece's budget deficit is well over the European Union ceiling of three per cent of economic output and has been predicted to rise.