Greek Prime Minister George Papandreou ruled out calling a snap parliamentary election after apparently winning enough support in local elections to press ahead with an austerity programme.
Mr Papandreou's ruling PASOK socialist party was set to win at least seven out of 13 regions, said Yannis Karakadas, head of Singular Logic, a polling agency hired by the government.
‘Making a change is not easy. Greek people brought us to power a year ago and today confirmed that they want this change. We will continue with our task tomorrow,’ the prime minister said in a televised address to the nation.
Mr Papandreou had threatened to dissolve parliament, barely a year after coming to power, if the first round of the regional elections failed to give him a clear mandate to pursue budget cuts and reforms agreed in May under a €110bn EU/IMF bailout to save Greece from bankruptcy.
He had never made clear exactly how he would judge that voters had given him sufficient endorsement. In the 2009 national elections, PASOK won in all 13 regions.
The risk premium on Greek government debt had risen ahead of the poll on worries about an early election.
The spread between yields on Greek debt relative to German bunds had risen by more than 200 basis points to above 900 after Papandreou first threatened an early national election in late October.
Mr Papandreou said his priority would be to cut the Greek deficit and stabilise the economy.
The Greek economy, about 2.5% of the eurozone, is set to shrink by 4% this year as austerity measures bite.
