- - Sunday, June 17, 2012

ATHENS — Parties supporting Greece’s financial-bailout package seized victory Sunday in parliamentary elections that had been widely seen as crucial to the country’s — and the eurozone’s — future, as well as the well-being of the global economy.

But the coalition of conservative and liberal lawmakers likely to result from the elections still leaves much uncertainty to deal with politically, if not economically, analysts said.

The global economy hung in the balance as Greeks voted to either accept the austere terms of their $140 billion bailout or default on their debt and bolt from the 17-nation eurozone. Greece was forced to hold its second national election in as many months because officials who were elected in the May 6 balloting could not form a coalition government.

With almost all votes counted Monday morning, the center-right, pro-bailout party New Democracy had taken 29.6 percent of the vote, ahead of leftist party Syriza, which campaigned against the austerity measures and garnered 26.9 percent.

That will give New Democracy 129 seats in the 300-member parliament and a chance to form a coalition government with its historic rival — center-left party Pasok, which came in third with 12.3 percent and 33 seats. Syriza won 71 seats.

But analysts said that a New Democracy-Pasok coalition would be an uneasy alliance, even though both parties campaigned on working with other eurozone nations to help Greece through its financial woes.

“We will have previous warring parties Pasok and New Democracy having to go into bed with each other with many deep animosities,” said Kevin Featherstone, director of contemporary Greek studies at the London School of Economics.

“At the same time, an ascendant Syriza would be in an ideal position to act as the platform for all possible protests against the austerity measures and difficult reforms that a pro-Europe government would have to take.”

‘Stable and viable’

Syriza traditionally has been seen as a ragtag alliance of fringe leftist and environmentalist parties, but it shot to the forefront of Greek politics last month as it campaigned on an anti-austerity platform.

The party has promised to renegotiate the 2010 bailout agreement with Europe, nationalize banks and reverse pension and public-sector job cuts.

That message has appealed to many voters in Greece, where wages and pensions have been slashed, the health care system has collapsed and unemployment has skyrocketed.

“I believe that we, with Syriza, [have] hope of less austerity measures,” said Georgia Vorila, 30, from Athens, who voted for the leftist party Sunday.

On May 6, New Democracy, led by Antonis Samaras, came out marginally ahead of Syriza, but neither party was able to form a government.

Analysts say the consequences could be dire if coalition talks fail this time.

“Unless whoever gets elected can put together a government on Monday that is stable and viable, then I think it’s a matter of time before Greece has to leave the eurozone,” said Roman Gerodimos, a lecturer in international current affairs at Bournemouth University in Britain.

After the results became clear Sunday, German Finance Minister Wolfgang Schaeuble called the vote a decision to “forge ahead” with far-reaching reforms.

The office of German Chancellor Angela Merkel’s office said she had called to congratulate Mr. Samaras and assumes “that Greece will keep to its European commitments.” The Obama administration and the Group of 7 industrial countries also sent encouraging messages to Mr. Samaras.

Fear factor

Analysts said that many voters supported New Democracy out of fear of such a chaotic and uncertain future.

“If New Democracy wins, that would mean that fear has played the biggest role,” Theodore Pelagidis, an economist and the University of Piraeus in Greece, had said.

New Democracy has said it will ask for a relaxation of the terms of the bailout — allowing Greece more time to repay its debts. German Foreign Minister Guido Westerwelle indicated flexibility on that point Sunday evening, though he repeated his government’s insistence that the agreements must be upheld.

“There cannot be substantial changes to the agreements, but I can well imagine talking again about timelines, against the background of the fact that, in reality, there was a political standstill in Greece over recent weeks because of the elections,” he told ARD television.

Analysts say Greek officials for the most part would continue to toe the European line on austerity.

“I suspect [New Democracy] would continue with the structural adjustment and stabilization program — they said they would do,” said Costas Lapavitsas, an economist at the University of London, speaking from Athens.

“I think this is a dead end,” he added, saying that the policy would merely delay the country’s inevitable exit from the currency.

Analysts say Syriza is likely to play a powerful opposition role in the new parliament.

“The gap is not big, and that’s not great, because even if they do put together a coalition government, it means Syriza will think they have the social legitimacy to resist whatever measures are being taken,” Mr. Gerodimos said.

“That will take us into the next two or three months, and it’s not just down to what the Greek government does, it’s also what the lenders do, what the EU does and what the [International Monetary Fund] does and so on. It will make the negotiations and dynamics that more complicated.”

Europe will be watching intently to see how coalition talks unfold over the next few days.

“There will be instability in the markets worldwide and pressure from parts of Europe on Greek politicians to form a government,” said George Tzogopoulos of the Athens-based Hellenic Foundation for European and Foreign Policy.

“[But] Greek politicians lack the maturity to put national interests above their political ones, which is why it is very difficult for them to cooperate.”

Ruby Russell reported from Berlin.

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