People gather at the central kiosk of Athens' candidate mayor Giorgos Kaminis who is backed by government's party PASOK and Democratic Left on Saturday, Nov. 6, 2010. Voters in crisis-hit Greece cast ballots in local polls Sunday, in a major test of public support for austerity measures that could trigger a snap general election. The vote pits Prime Minister George Papandreou's 13-month-old Socialist government against opposition parties all campaigning against the terms rescue-loan deal with the European Union and IMF. The sign on the laptop reads '' Ask me where do you vote.'' (AP Photo/Thanassis Stavrakis) (Thanassis Stavrakis, AP / November 6, 2010)
ATHENS, Greece (AP) — Greeks cast ballots Sunday in local elections that could reverberate across world markets: Prime Minister George Papandreou has vowed to call a snap general election unless voters show support for his bracing austerity measures.
Papandreou's 13-month-old Socialist government instituted the fiscal reforms so his debt-strapped nation could receive euro110 billion ($140 billion) in bailout loans from the European Union and International Monetary Fund.
However, he has not said clearly what results he would consider satisfactory, leaving himself some room to maneuver. The Socialists appear unlikely to suffer a heavy defeat, with opinion polls predicting a roughly even split with main opposition conservatives in the 13 regional governor races.
Opposition parties have all campaigned against the terms of the bailout loans, adding pressure on Papandreou, who has faced months of disruptive strikes and protests as a deepening recession caused a surge in unemployment and small business failures.
Conservative leader Antonis Samaras has urged the government to "change course" and replace austerity with a policy of state investment to stimulate the economy.
"We are measuring the government's strength ... to see whether it can continue the implementation of an exceptionally difficult economic and social policy," said political analyst and publisher Giorgos Kyrtsos.
The early election threat has spooked bond markets concerned about Greece's ability to cope with the massive government debts that triggered a financial crisis and affected the 16-nation euro currency. The uncertainty has sent borrowing costs sharply higher, with the interest-rate gap between Greek 10-year bonds and Germany's benchmark equivalent exceeding 9 percentage points on Friday.
Papandreou came to power in October 2009 with a landslide victory over the conservatives, and his party enjoys a comfortable majority in Parliament. But his popularity has taken a beating following stringent austerity measures, including freezing pensions and trimming salaries.
"Today is a day of important decisions," Papandreou said as he voted in a northern Athens suburb. "We are also taking decisions for the stability of the course of the country."
Opposition parties have accused Papandreou of using blackmail to force Greeks to vote in local elections, which usually see lower turnout than national polls. Some 9.8 million people are eligible to vote.
"I am not bluffing, but nor, of course, is going to (national) elections my first choice," Papandreou told the weekend edition of Ta Nea newspaper. "My only criteria is the interest of the country and of Greeks."
He insisted that the gains Greece has made in reforming its economy could be under threat.
"I have a duty to note that danger," he said. "We are winning battles but we have not yet won the war."
EU and IMF officials are due back in Athens this month for a fiscal inspection. The EU's statistics service Eurostat is to again revise Greece's 2009 budget deficit upward, with the figure expected to exceed 15 percent of gross domestic product from the current projection of 13.6 percent.
Sunday's election follows reforms in local government that boosted the power of Greece's 13 regional governors, who are directly elected for the first time, and reduced the number of municipalities from 1,014 to 325. Runoff elections will be held on Nov. 14.
The very idea of a national election in such troubled times sparked fear in some voters.
"There shouldn't be elections again, I think," said Sofia Panagiotopoulou, an 86-year-old voter in Athens. "We are at the edge of the cliff and we will vote for the status quo so that we can have peace of mind."
Elena Becatoros and Nathalie Rendevski-Savaricas in Athens contributed to this report.