Greek President Karolos Papoulias (R) welcomes leader of conservative New Democracy party Antonis Samaras before he receives a mandate to form a government on June 18, 2012 in Athens, Greece. (image credit Yorgos Karahalis/Getty)
Athens (written by Charles McPhedran & Tim Mullaney/USA Today) -- A pro-Europe party narrowly won the most votes in the Greek elections Sunday, an outcome that has calmed markets but still leaves plenty to worry about in Europe's economy.
Asian stock markets climbed early Monday on the news of the conservative New Democracy party's strong finish, as did those in Greece with Athens stocks gaining 5.4 percent in early midday trading.
Greek voters rejected a leftist coalition that had promised to toss out the stringent terms of Greece's bailout, which could have led to the country abandoning the euro currency and thrown financial markets into turmoil.
The New Democracy Party has said it generally backs the bailout deal. "The Greek people today voted for Greece to remain on its European path and in the eurozone," New Democracy leader Antonis Samaras said. Rival Alexis Tsipras of the SYRIZA coalition conceded the election.
Political analysts say the election results averted a catastrophe but did not fix the broader problems facing Greece or larger eurozone nations such as Spain and Italy.
Although the eurozone will need up to a decade to fix its financial problems, holding off the euro's imminent collapse will keep the U.S. economy from being pushed into recession by the euro's woes, said Moody's Analytics chief economist Mark Zandi.
"We dodged a bullet, but they've got a lot more bullets coming," Zandi said.
"It doesn't end the Greek crisis," said Peter Cardillo, chief market economist at Rockwell Global Capital, a New York City investment bank. "It may take some pressure off, and now the market will look to the European Union summit later this month to come up with concrete measures to take more pressure off."
Samaras will try to form a coalition government. No party got enough votes to govern alone.
With 129 of Parliament's 300 seats, New Democracy lacks enough legislators to govern alone, and must seek allies among the pro-bailout Socialists, who came third.
Conditions in Greece have worsened over the past two years. Public spending cuts have resulted in a shortage of medical supplies and hospital beds. Unemployment hit 21.9% in March, and many who have jobs are not receiving wages.
The anti-euro coalition, SYRIZA, emerged from nowhere to capitalize on frustration with Greece's economy and the austerity measures that were part of the bailout.
"No bank or European country can tell us how to vote, and I really don't care if the European countries kick us out of the eurozone," said Skouras Athanasios, a 37-year-old mini-mart owner in Athens, who voted for SYRIZA.
New Democracy won support from people who feared what might happen if Greece rejected the terms of its $300 billion in bailouts.
"We are all in a panic because the result will change so much," said Iona Dano, a 37-year-old business owner in Athens.
"People have taken out loans in euros, and they are in a lot of debt. Things will go bad if we have the drachma back."