Greece's conservative New Democracy party has received the presidential mandate to start talks on building a new coalition government following the party's win in the debt-ridden country's early general elections.
Party leader Antonis Samaras said he will seek to build a "long-term national unity government" to implement the austerity measures agreed in exchange for urgently needed international loans.
The conservatives' election win has at least temporarily eased fears that Greece may be forced to leave the eurozone -- a step that analysts warn could cause global financial chaos.
European markets and the value of the euro rose on opening on June 18, but the gains quickly evaporated amid fresh concerns about debt problems in Spain and Italy.
Germany has welcomed the Greek election result but warned that Athens must still fulfill the conditions for its international bailouts.
New Democracy was given three days to form a government.
The leftist Syriza bloc -- which is opposed to the austerity reforms required for the bailouts -- finished second in the June 17 election has ruled out joining a coalition.
Syriza leader Alexis Tsipras said Syriza will remain in opposition and continue to fight the austerity reforms.
With nearly all ballots counted, New Democracy has 129 seats in the 300-seat parliament, Syriza 71 seats.
Previous Greek governments have pledged to implement tough austerity measures in exchange for two packages of European Union and International Monetary Fund loans worth a total of 240 billion euros.
Without the loans, Greece risks default and would likely have to leave the 17-member eurozone.
Germany, the European Union's top economy and biggest single national funder, welcomed the election result as a clear signal Greece wanted to remain in the eurozone.
But German Foreign Minister Guido Westerwelle warned on June 18 that "whatever government is formed [in Greece] must stick to what has been agreed with Europe."
Westerwelle said "the substance" of Greece's austerity reform program was non-negotiable. However, he suggested Greece could be given more time to carry out the reforms.
"It is important that the substance of [Greece's austerity reform] program cannot be changed. Everything that has been negotiated will be adhered to," Westerwelle said. "We have shown that Germany is prepared to show solidarity, but now we may expect Greece to solidly and insistently implement what has been negotiated. And this is what the election result reflects."
Analysts have warned that a Greek exit from the euro could put into doubt the survival of the currency itself, and potentially trigger global financial mayhem if other European government default on their debts and the value of the euro plunges.
With reporting by Reuters, AP, and AFP