The final outcome of the vote determines Greece’s relationship with the euro zone, the 17 European Union countries that share the euro. New Democracy, which also took the most votes (19 per cent) in the May election, has vowed to keep the austerity-for-bailout program intact. However, the party has also vowed to renegotiate the program, for fear that leaving it intact will guarantee another five years of deep recession as the spending cuts and tax hikes destroy growth.
Syriza’s original plan to kill the austerity program would have almost certainly guaranteed that the European Union (E.U.) and the International Monetary Fund would withhold bailout funds, making the country insolvent. But Alexis Tsipras, the party’s young charismatic leader, has recently moderated his demands and says he does not want the country to return to the discredited drachma.
While foreign leaders and media portray the vote as a referendum on Greece’s use of the euro, many Greeks see it simply as a chance to elect a government that will be more fiscally responsible than the last one, and to improve the economy after five years of recession.
In the May election, 70 per cent of the vote went against New Democracy and the socialist Pasok party, the two parties that held power in Greece for decades and whom many blame for Greece’s financial ruin. Greece has been bailed out twice since 2009 by the E.U. and the IMF, at a cost of almost €300-billion ($388-billion Canadian), and went through one debt-crunching exercise, which shaved €100-billion off the value of the sovereign bonds held by private investors. Still, Greece’s economy has remained in free fall.
In spite of the differences on paper among the leading parties – more than 20 parties were on the Sunday ballot – almost all wanted Greece to stay in the euro and renegotiate the bailout package. “All Greek parties will ask for similar things,” said Greek communications strategist Stratos Safioleas. “They want some sort of renegotiation with the European Union. Even Syriza is starting to moderate its rhetoric. I think they won’t do anything reckless.”
While many voters did not think that New Democracy deserved to be rewarded with an election victory, many were also wary of Tsipras, whose Syriza came out of nowhere in the May election to capture almost 17 per cent of the vote. The radical left nailed less than 5 per cent of the vote in the previous election in 2009.
Tsipras’ critics said he doesn’t have the experience to stand up to Greece’s paymasters in Brussels and Berlin, where German Chancellor Angela Merkel continues to preach her austerity-for-everyone message as the best way to put Europe on a sustainable financial and economic footing.
Some also feared Syriza would make good on its original vow to kill the bailout program, which would probably force Greece to leave the euro and reprint the drachma, a currency that would plummet in value against the euro the moment it was reintroduced. “Greece has to stay in the euro or otherwise we would be a shipwreck,” said Ian Vorres, the Greek-Canadian creator of the Vorres Museum, a modern art museum in suburban Athens.
The Democratic Left party, which received 7 per cent of the votes in May, has emerged as a key coalition party. New Democracy is led by Fortis Kouvelis, who has said he would not outright cancel the bailout program.
Intellpuke: You can read this article by Globe and Mail correspondent Ed Reguly, reporting from Athens, Greece, in context here: www.theglobeandmail.com/news/world/greek-pro-bailout-party-proposes-coalition-after-election-win/article4299237/
Reporting by Associated Press writers was used in this news article.