By Ingrid Melander and Harry Papachristou
ATHENS, Nov 7 (Reuters) - Greek Prime Minister George Papandreou ruled out calling a snap parliamentary election on Sunday after apparently winning enough support in local elections to press ahead with an austerity programme.
Papandreou's ruling PASOK socialist party was set to win at least seven out of 13 regions, said Yannis Karakadas, head of Singular Logic, a polling agency hired by the government.
'Making a change is not easy. Greek people brought us to power a year ago and today confirmed that they want this change. We will continue with our task tomorrow,' Papandreou said in a televised address to the nation.
Papandreou had threatened to dissolve parliament, barely a year after coming to power, if the first round of the regional elections failed to give him a mandate to pursue budget cuts and reforms agreed in May under a 110-billion-euro ($155-billion) EU/IMF bailout to save Greece from bankruptcy.
He had never made clear exactly how he would judge that voters had given him sufficient endorsement. In the 2009 national elections, PASOK won in all 13 regions.
The risk premium on Greek government debt had risen ahead of the poll on worries about an early election.
The spread between yields on Greek debt relative to German bunds had risen by more than 200 basis points to above 900 after Papandreou first threatened an early national election in late October.
'It's good news that Papandreou can continue and that no political uncertainty enters the fray. He didn't win the election but he also didn't lose it,' said Andreas Scheuerle, an economist at Dekabank.
'He is a bit weaker but he isn't damaged, he came out of it with a black eye. That was well expected because it's natural for Greeks to let off some steam.'
Papandreou said his priority would be to cut the Greek deficit and stabilise the economy.
The Greek economy, about 2.5 percent of the euro zone, is set to shrink by 4 percent this year as austerity bites.
The Socialists came to power on plans to boost welfare spending. But they were soon forced to switch to pay cuts, tax hikes and a pension freeze after a debt crisis exploded when they revealed state finances were much worse than expected.
Unlike governing parties in other deficit-ridden countries such as Ireland and Portugal, PASOK enjoys a comfortable parliamentary majority.
The second round of the local polls will be on Nov. 14.
(Additional reporting from Angeliki Koutantou, Renee Maltezou; Writing by Myra MacDonald; Editing by Kevin Liffey)
(( For an interactive timeline on the Greek Debt crisis, click on http://link.reuters.com/sas64n
For a factbox on Greece's key regions
For an analysis on snap election talk ($1=.7123 Euro) Keywords: GREECE ELECTIONS/ (ingrid.melander@reuters.com ; +30 210 337 6438; Reuters Messaging: ingrid.melander.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
ATHENS, Nov 7 (Reuters) - Greek Prime Minister George Papandreou ruled out calling a snap parliamentary election on Sunday after apparently winning enough support in local elections to press ahead with an austerity programme.
Papandreou's ruling PASOK socialist party was set to win at least seven out of 13 regions, said Yannis Karakadas, head of Singular Logic, a polling agency hired by the government.
'Making a change is not easy. Greek people brought us to power a year ago and today confirmed that they want this change. We will continue with our task tomorrow,' Papandreou said in a televised address to the nation.
Papandreou had threatened to dissolve parliament, barely a year after coming to power, if the first round of the regional elections failed to give him a mandate to pursue budget cuts and reforms agreed in May under a 110-billion-euro ($155-billion) EU/IMF bailout to save Greece from bankruptcy.
He had never made clear exactly how he would judge that voters had given him sufficient endorsement. In the 2009 national elections, PASOK won in all 13 regions.
The risk premium on Greek government debt had risen ahead of the poll on worries about an early election.
The spread between yields on Greek debt relative to German bunds had risen by more than 200 basis points to above 900 after Papandreou first threatened an early national election in late October.
'It's good news that Papandreou can continue and that no political uncertainty enters the fray. He didn't win the election but he also didn't lose it,' said Andreas Scheuerle, an economist at Dekabank.
'He is a bit weaker but he isn't damaged, he came out of it with a black eye. That was well expected because it's natural for Greeks to let off some steam.'
Papandreou said his priority would be to cut the Greek deficit and stabilise the economy.
The Greek economy, about 2.5 percent of the euro zone, is set to shrink by 4 percent this year as austerity bites.
The Socialists came to power on plans to boost welfare spending. But they were soon forced to switch to pay cuts, tax hikes and a pension freeze after a debt crisis exploded when they revealed state finances were much worse than expected.
Unlike governing parties in other deficit-ridden countries such as Ireland and Portugal, PASOK enjoys a comfortable parliamentary majority.
The second round of the local polls will be on Nov. 14.
(Additional reporting from Angeliki Koutantou, Renee Maltezou; Writing by Myra MacDonald; Editing by Kevin Liffey)
(( For an interactive timeline on the Greek Debt crisis, click on http://link.reuters.com/sas64n
For a factbox on Greece's key regions
For an analysis on snap election talk ($1=.7123 Euro) Keywords: GREECE ELECTIONS/ (ingrid.melander@reuters.com ; +30 210 337 6438; Reuters Messaging: ingrid.melander.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.