Faced with the tough job of making changes needed to bring the economy into line with other euro zone countries, he could find limited room for manoeuvre limited after deadly forest fires and scandals. 
"The President gave me the mandate to form a government," Karamanlis told reporters after meeting President Karolos Papoulias. "We owe it to all Greeks, whatever they voted, to move ahead quickly, with determination and take the country forward." 
The conservatives won 152 seats in the 300-seat parliament, down from 165 seats in 2004 when they swept to power ending 11 years of socialist rule. Karamanlis vowed to push on with reforms such as shoring up an ailing pension system and planned privatisations. 
"Their life will be difficult now," said Theodore Kouloumbis, vice president of the Hellenic Foundation for European and Foreign Policy.
The opposition socialist PASOK party had its worst result since 1977.