Greece faces early elections, fiscal fears

ATHENS, Greece - Greece's government was forced Monday to call early national elections, stoking financial concerns as investors worry the main opposition party will win - and want to renege on the country's bailout deal.

The Athens stock market closed 4 percent lower, recovering from an earlier 11 percent plunge on news of the election, which was triggered by parliament's failure to elect a new president.

Investors fear the left-wing opposition Syriza party, which has a narrow but steady lead in opinion polls, might act on popular resentment at six years of government austerity by seeking to overhaul the international bailout deal.

At the height of the eurozone crisis in 2010-12, Greece's financial turmoil risked breaking up the currency union, an event which would have shaken the global economy.

The risks today are not as great, analysts say. For one, little of Greece's debt is held by private investors around the world, but mainly its bailout creditors, the International Monetary Fund, and other eurozone countries.

Also, the European Union and European Central Bank now have programs meant to stabilize markets and support confidence in eurozone markets.

"Due to the policy advances made, the safeguards that have been put in place and the ECB's stated public commitment to doing whatever is necessary to keep the eurozone together, events in Greece now pose much less of a threat to the eurozone" than a few years ago, IHS Global Insight economist Howard Archer said in a note.

However, should a new government seek changes to the deal, Greece's access to credit would be delayed just as its bailout loans are coming to an end. Greece still cannot finance itself independently on bond markets, so it faces the danger of a default that could hurt the finances of fellow European countries.

The IMF said Monday that a review of Greece's bailout program, which the payment of the next batch of rescue loans depends on, will resume only after the new government is in place. It said Athens faces no immediate financing needs, however.

Conservative Prime Minister Antonis Samaras said national elections, the fourth in six fraught years of financial crisis, will be held "at the soonest possible date" - Jan. 25, which is 18 months early.