Greek PM declares victory

Greek PM declares victory

Prime Minister Costas Karamanlis conservative party has won re-election in Greece, despite his government's shaky handling of devastating forest fires.

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Results from over 77 percent of polling stations early Monday showed the ruling conservatives leading the socialists by 42.85 percentage points to 38.5.

VIDEO: PM celebrates result

"You have given a clear mandate to New Democracy to continue the changes and reforms which the country needs," Mr Karamanlis said in a televised address to the nation.

"I will do my utmost to honour your confidence as prime minister of all Greeks," Mr Karamanlis said.

Scores of the New Democracy Party supporters gathered outside polling stations in Athens and the second city Salonika, dancing, waving party flags, sounding car horns and setting off fireworks.

Socialists concede defeat

Socialist leader George Papandreou, foreign minister until 2004, had conceded defeat moments before Mr Karamanlis spoke.

"The people have decided… and the result is an unfavourable one," Mr Papandreou said.

"Pasok gave a great battle but it could not win. We all had responsibilities in this battle, myself above all," he said.

Small parliamentary majority

Mr Karamanlis' party won a second straight term despite initial concern that his government's credibility had been badly damaged by its handling of the devastating forest fires which killed more than 60 people and ravaged huge swathes of forest and farm land in August.

Both New Democracy (ND) and Mr Pasok lost ground in the election compared to their showing in 2004, with smaller parties on the left and right making significant gains.

"The government will have an absolute majority but it will be fragile," said Left Coalition leader Alekos Alavanos, whose party was shown winning over four percent of the poll and could elect 12 deputies.

The Communist KKE party fared better still, with an estimated result of over seven percent and 20 parliamentary seats, and the small nationalist LAOS party was expected to enter parliament, marking the first time a far-right party has secured representation in 26 years.

A clear picture on parliamentary seats was expected later today.

ND was desperate to garner at least 42 percent of the vote, a necessary condition for outright majority under a more proportional electoral law taking effect for the first time in this election.

Mr Karamanlis last week indicated that he would govern even with a small parliamentary majority.

The prime minister has pledged to push forward with economic reforms and an overhaul of higher education that have proven unpopular with unions and leftist groups, causing mass demonstrations in recent months.