Eurozone jitters as Greece votes in election
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People are seen checking the lists of the polling stations on the eve of the Greek general elections in Athens, on May 5. Greece readies for elections with voters angry about austerity cuts and uncertainty over whether a new government can be formed with a strong enough mandate to push through yet more reforms demanded by its international creditors. (AFP Photo/Louisa Gouliamaki)
Greeks vote in an early general election on Sunday that threatens to turn the country's decades-old political system on its head and bring the eurozone crisis back with a vengeance.
After two years of austerity cuts, polls indicate that voters are set to punish Greece's two main parties for having accepted yet more belt-tightening in return for two bailouts worth 240 billion euros ($314.0 billion).
Greece has written off a third of its debts and is in its . One in five workers is unemployed, its banks are in a precarious position and pensions and salaries have been slashed by up to 40 percent.
With Portugal and Ireland also getting aid and Italy and Spain on shaky ground too, last year there were worries of some sort of break-up of the eurozone. These fears have subsided in recent months but have not completely disappeared.
Germany, in particular, Europe's paymaster-in-chief and the leading proponent of austerity -- amid growing calls for more focus on growth -- will likely be watching events in Athens just as much as France's election the same day.
In comments widely quoted by Greek newspapers on the eve of Sunday's vote, German Finance Minister Wolfgang Schaeuble said that if Greece's new government deviated from its commitments the country would have to "bear the consequences."
"Membership of the European Union is voluntary," he said. His boss, Chancellor Angela Merkel, has managed to keep critics over the bailouts at bay so far but fresh eurozone upheaval could very quickly start to erode her popularity.
For markets too, it is Greece's vote rather than whether Francois Hollande succeeds Nicolas Sarkozy as French president that "weighs heavier" in investors' minds, said Valerie Plagnol, Credit Suisse director of research.
Holger Schmieding, economist at Germany's Berenberg Bank, said there was a 40-percent risk of Greece leaving the eurozone this year, with a "high" chance that no stable government willing to implement more reforms can be formed.
Pasok and New Democracy conservatives have alternated in power since the end of a military junta in 1974, but on Sunday a seismic shift is expected with as many as half of the votes going to around 30 smaller parties.
Voters are also fed up with decades of corruption and cronyism, while immigration has also been an issue, raising the prospect that the neo-Nazi Golden Dawn, with a swastika-like emblem and an admiration for Hitler, may enter parliament.
Both Pasok and New Democracy want the "troika" of the European Union, International Monetary Fund and European Central Bank to cut Greece more slack in their bailout deals, but for many smaller parties this does not go far enough.
"We need to break from this corrupt political system of lackeys of foreign imperialism," Petros Alachmar, 31, an activist from far-left Syriza party told AFP. "We have had enough of austerity measures."
But with Athens having committed to finding in June another 11.5 billion euros in savings through 2014, any ambition to renegotiate terms "suggests a degree of liberty they do not have," Swiss bank UBS said in a research note.
New Democracy is expected to win the most votes, but not enough for leader Antonis Samaras to govern without partners. One might be Pasok, its current partner in a stop-gap coalition. Another possibility might be fresh elections.
Polls open at 0400 GMT, with exit polls expected shortly after voting ends at 1600 GMT. The first representative official results are not expected much before 2000 GMT.