Euro reprieved, not saved, papers warn after Greek vote

(PARIS) - The world breathed a sigh of relief Monday after a pro-bailout party won a vital vote in Greece but newspapers warned the global economy had only bought itself a little more time.

Sunday's repeat election in debt-crippled Greece was won by New Democracy's conservatives, who agree to a tough austerity-based international bailout plan aimed at avoiding bankruptcy.

The leftist Syriza party that argues Greeks are paying too high a price was just edged out, averting a scenario which could have seen Greece exit the euro and drag the continent, and the global financial system, deeper into crisis.

"Greeks, the eurozone and the rest of the world breathed a sigh of relief after the Greek election results," said the El Pais newspaper in Spain, likely one of the first economies to take the fall if the eurozone unravels.

"But with these results, the euro isn't out of the woods," it warned.

In Europe's financial capital London, the Times said Greece's election has failed to clear the smoke fogging its future. Germany must now make clear how far it is ready to go to safeguard the euro and Europe's economy, it said.

"Deadlock may have been averted. But we are still no surer -- in spite of the joint success of the pro-bailout New Democracy and Pasok parties -- whether Greece's future within the eurozone is sustainable in the long term.

"For, in truth, while it was Greece that had the election, it is Germany that has the choice over Greece's future."

German editorialists Monday saw the result from Greece's re-run elections as the worst having been avoided.

"A bit of hope" headlined news weekly Spiegel online, saying the conservative New Democracy party's victory had only provided a "short breathing space".

"The nation is deeply divided, the coalition talks are beginning under difficult conditions," it said. "There's a threat of fresh chaos if the Greeks don't finally get it together."

Germany has taken a tough line in Europe's debt crisis, advocating belt-tightening while some, including France's new socialist government, are pushing for measures to spur growth.

State media in China argued that Greek voters must now understand that an "exit from the eurozone is out of the question" because it would open a "Pandora's box", leading to "years of painful economic and social adjustments".

German Chancellor Angela Merkel swiftly reacted to Sunday's vote by calling victorious conservative leader Antonis Samaras, who said he wanted a new government to be formed immediately.

She told him she trusted any newly-formed coalition would confirm its commitment to Europe and abide by the demands of the rescue package laid out by the EU and International Monetary Fund.

But the US' leading business paper argued that Germany, Europe's paymaster, may have actually wanted Greece to crash out of the monetary union to avoid bankrolling a costly and uncertain bailout.

"The Germans are beginning to conclude that Greece may be unreformable. A Syriza victory would have been seen as Greece pulling the plug on its own euro membership," The Wall Street Journal wrote in an editorial.

"Mrs Merkel will still face a difficult decision if Mr Samaras forms a government and then seeks to renegotiate the bailout because he lacks the cash to fulfill its terms.

"Would the German Chancellor dare to say no, thus becoming the proximate cause of a first euro exit?"

burs-jmm/hmn