Popular mandate renders austerity measures invalid, Greek radical-left party leader says

Alexis Tsipras, leader of the Greek radical-left Syriza party, has said the popular mandate clearly renders the austerity measures and bailout invalid.

The leader of the Syriza party, which came second in Sunday’s election, says Greece is no longer bound by austerity promises made in return for rescue loans after Greek voters rejected mainstream pro-austerity, pro bail-out parties.

The comments flew in the face of EU leaders’ insistence on fiscal discipline and sent the Greek stock market tumbling to the lowest level since 1992.

Tsipras demanded an examination of Greece’s still-massive debt and a moratorium on repayment of part of it.

“The pro-bailout parties no longer have a majority in Parliament to vote in destructive measures for the Greek people,” said Tsipras.

“The popular mandate clearly renders the bailout agreement invalid.”

Tsipras is the second Greek party leader in as many days to try to form a government.

If no coalition can be found, new elections will be held in a month.

Moving to stomp out signs of increasing discontent in Europe, the European Union and Germany, the biggest contributor to the EU’s crisis fund, urged members to stick to their agreed budget cuts.

German Foreign Minister Guido Westerwelle said the debt policy has been agreed in Europe.

European Commission President Jose Manuel Barroso said member states must implement their promised spending cuts and tax increases.

“The situation in Europe could get worse before it gets better,” James McDonald chief investment strategist at Northern Trust in Chicago told Bloomberg.

“The concern is about the potential that Greece does not carry through on their agreements and they default and leave the euro. While investors have known Greece is going to be challenged to handle their debt load, it’s another thing to watch unfold.”