Conservatives concede defeat in Greek election

ATHENS, Greece — Greece’s governing conservatives have conceded defeat to the main opposition Socialists in Sunday’s parliamentary election.

A party statement says Prime Minister Costas Karamanlis phoned Socialist leader George Papandreou to congratulate him on the party victory.

Karamanlis “wished him good luck,” the statement said. Official projections show the Socialists set to beat the scandal-mired conservatives by around 10 percentage points.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

ATHENS, Greece (AP) — Greek voters angered by repeated scandals and a faltering economy ousted Prime Minister Costas Karamanlis in an early election Sunday, returning the Socialists to power after five years of conservative governance, initial results indicated.

Final projections issued by the company carrying out the vote counting indicated that former foreign minister George Papandreou’s Panhellenic Socialist Movement, or PASOK, would win with a landslide, gaining 43.8 percent of the vote with Karamanlis’ New Democracy trailing with 33.9 percent.

If the figures are confirmed, the Socialists will be able to form a strong majority government with as many as 160 seats in the 300-member parliament, avoiding the need for a second round. It would also be New Democracy’s worst ever election performance.

“This is a historic victory for PASOK, which means great responsibility for us,” senior party official and former minister Evangelos Venizelos said outside party headquarters, surrounded by jubilant supporters cheering and waving PASOK flags depicting the party’s symbol of a green rising sun.

Official results from 18.56 percent of votes counted showed the Panhellenic Socialist Movement ahead with 43.16 percent, compared to 36.07 percent for New Democracy.

In the last elections in 2007, the conservatives won with 41.8 percent compared to the Socialists’ 38.1 percent, and had a marginal majority of 152 seats in parliament, later reduced to 151.

Karamanlis, 53, called the election just halfway through his second four-year term in a gamble that ultimately failed, saying he needed a strong new mandate to tackle Greece’s economic woes. He had already been trailing in opinion polls when he called the election in early September, sparking criticism from within his own party.

Karamanlis stormed to power in 2004 to become the youngest prime minister in modern Greek history after more than a decade of socialist rule. He was re-elected in 2007, but quickly saw his popularity eroded by a series of major financial scandals, including a land-swap deal with a Greek Orthodox monastery that cost the state more than euro100 million ($145 million) and forced two of Karamanlis’ close aides to resign.

Authorities’ failure to contain widespread riots sparked by the fatal police shooting of a teenager in Athens in December also undermined the conservatives’ position, which the global financial crisis finished off.

Many conservative voters were angered by rising crime and the December riots, when anarchists rampaged through the capital and other cities, smashing shops and banks with little police intervention.

A small bomb exploded in Athens on Friday, without causing injury, two blocks from the site of Karamanlis’ final campaign speech. A far-left group, Conspiracy Nuclei of Fire, claimed responsibility for the bombing, which caused no injuries.

“What I believe is happening today is that Karamanlis is paying for his past mistakes, for the financial situation,” voter Alexandros Panagiotakopoulos said Sunday, standing outside New Democracy’s headquarters watching the results on a giant outdoor screen.

Now, it will be the 57-year-old Papandreou who will have to deal with his country’s faltering economy, which is expected to contract in 2009 after years of strong growth, while the budget deficit will probably exceed 6 percent of economic output.

In contrast to Karamanlis, who advocated an austerity program of freezing state salaries, pensions and hiring, Papandreou has promised to inject up to euro3 billion to jump-start the economy. However, his government will likely have to borrow heavily just to service the ballooning debt — set to exceed 100 percent of GDP this year — and keep paying public sector wages and pensions. Papandreou has pledged to limit borrowing by reducing government waste and going after tax dodgers.

The Greek Communist Party, far right-wing LAOS and the small Left Coalition are expected to retain their representation in Parliament, while the Ecologist-Greens were hovering on the fringe of the 3 percent threshold for entry.

Socialist foreign policy spokesman Andreas Loverdos said Karamanlis “called an early election to take us by surprise, and ended up surprising his own party.”