By RACHEL PANNETT SYDNEY--The Australian dollar was higher late Monday as markets welcomed news the pro-austerity New Democracy party eked out an election victory in Greece, reducing the likelihood of a Greek exit from the euro-zone. Still, policymakers warned there's a long way to go before the political and economic uncertainty in Europe is resolved, amid fears a new government in Athens could be fragile and short-lived. Heather Ridout, a member of the Reserve Bank of Australia's policy-setting board, urged European leaders to act swiftly to avoid a sovereign debt crisis spreading beyond Greece and Spain into a global slowdown that affects not just Europe but also the U.S. and China, Australia's biggest trade partner. "People need confidence that the Europeans have really got a plan to deal with these issues and we start to see some clarity and people can start to make investments and employ people," Ms. Ridout said in an interview. "What's going on in Europe, as everybody understands, is not just about Europe. It's almost as much about the rest of the world as it is about them." At 0551 GMT the Australian dollar was at US$1.0116 from US$1.0014 late Friday and at Y80.08 from Y78.98. Sydney-based Deutsche Bank currency strategist John Horner underscored that while Sunday's election result helps to alleviate the near-term risks, "the medium-term questions remain very much in place." He said there are still "many question marks over Greece's ability to adhere to the [European Union bail-out] package it has signed up for and the very real economic weakness that its economy is facing." Australian Treasurer Wayne Swan, speaking in Canberra, said European leaders should now focus on boosting growth, shoring up the banking system and paying down debt. "There is no doubt that the people of Greece have taken a decision. It means we will hopefully see a government formed in a speedy way so they can get on working on the challenges that are before them," Mr. Swan said.

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