Greece heads to the polls under pall of fire tragedy

ATHENS (AFP) — Greece held general elections Sunday for a new parliament in what was expected to be a close call for Prime Minister Costas Karamanlis' conservatives in the aftermath of a national fire tragedy.

After one of the briefest electoral campaigns in decades that lasted only a month, pollsters anticipated a neck-and-neck race between the ruling New Democracy party and the opposition Pasok socialists.

For although the ND party led by Karamanlis carried a slim lead into Sunday's decider, an unusually high number of undecided voters and general alienation over the forest fires that killed over 60 people in August make this election too close to call.

"The fires had a very serious effect on the electoral campaign, changing both the electorate's psychology and the political agenda and forcing the parties to redraft their strategies," said political analyst George Sefertzis.

"New Democracy seems to be leading, but it is a hollow advantage given the number of undecided voters," he told AFP.

In the Peloponnese peninsula south of Athens, the area worst hit by the fires that ravaged thousands of hectares of forest and agricultural land, voters went to the polls with a heavy heart, but initial expectations of mass abstention in protest seemed unjustified.

"The voter turnout is just like in previous years," the mayor of Zacharo, the main town in the western Peloponnese where surrounding villages were badly mauled by the fires told state television NET.

"We went to vote without enthusiasm...we're obliged to go, but we don't know if anyone will help us once the elections are over," local resident George Thomopoulos told an AFP reporter in the village of Paleochori, where every home lies in ruins.

In the neighbouring village of Makistos, which only 14 homes were left unscathed, residents voted in a metal container.

"We are all in dire straits, but we must vote so that (politicians) don't forget about us," said local villager Stella Lambropoulou.

Polling stations opened across the country at 7:00 am (0400 GMT) and were to close at 7:00 pm, with exit polls expected soon after. Result projections are expected around 10:30 pm (1930 GMT).

Karamanlis, 51, is seeking a second four-year term on the strength of economic reforms that cut the budget deficit and unemployment and kept the economy growing at around four percent of GDP per year.

He called for early elections in mid-August, before the fires struck and with ND leading by under 2.0 percent, for a new mandate to continue reforms which must urgently include an overhaul of Greece's moribund pensions system.

The socialists led by 55-year-old George Papandreou, formerly foreign minister until 2004, have accused the prime minister of failing to protect Greece from the fires and of neglecting promises to combat corruption.

Both parties are desperate to garner at least 42 percent of the vote, a necessary condition for an outright majority under a more proportional electoral law taking effect for the first time in this poll.

Nearly 10 million Greeks are eligible to vote.

The 2007 race is also expected to see a far-right party enter the Greek parliament for the first time in 26 years with LAOS, a small nationalist party widely seen as anti-Semitic and xenophobic.

Voting is compulsory in Greece for citizens aged 18-70, though absence can be excused under special circumstances such as distance of residence. A 2001 constitutional revision did away with sanctions for abstention, which were never enforced in recent years.

Elections were originally scheduled to be held in March 2008.

Greece and Turkey emerging as more sheltered options

By Tim Sharp
Where do you invest when stock markets are choppy? The unlikely answer for Citywire AAA-rated New Star Global Financials manager Guy de Blonay is Turkey, Greece, Brazil and Russia.

While emerging markets are usually regarded as risky markets, Mr de Blonay reckons they are sheltered from problems involving defaults on sub-prime loans in the United States that have damaged banks in many developed markets.

Mr de Blonay said: "Our best performance is coming from parts of the world with no sub-prime exposure. I am seeing good growth from Greece which has a long-term growth cycle, and peripheral markets like Russia, Montenegro and Serbia."

He had recently increased his exposure to National Bank of Greece and Bank of Cyprus. "Cyprus is a favourable market for Russians to do business in. Brazil is also interesting and its economy is booming. Turkey is also cheap for an emerging market and while the Chinese market has exposure to sub-prime, it is a huge market and has a life of its own." He adds that investors might retain confidence in the banking and wider financial sectors once companies announce their financial results for the third quarter of the year.

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