Greeks voted yesterday in a tough-to-predict general election that threatened to turn the crisis-hit country’s old political system on its head and bring eurozone turmoil back with a vengeance.
After two years of austerity cuts, polls show that voters will punish the two main parties, the left-wing Pasok and conservative New Democracy, for promising more savings in return for two bailouts worth 240 billion euros (US$314 billion).
Instead, about half of the vote could go to 30 smaller parties, raising the prospect of protracted coalition negotiations for likely poll winner Antonis Samaras of New Democracy (ND), or even fresh elections.
“I am going to vote for one of the small parties. I have had enough of ND and Pasok,” psychology student Maria, 22, said. “Ever since I was born, people have just voted for them.”
“We will see if the Greeks have enough sense to choose parties other than the two big ones that have left Greece in such a state,” doctor Efthimis Karadimas, 43, said at a busy polling center in the capital.
Both Pasok and ND have said they want the “troika” of the EU, IMF and European Central Bank (ECB) to cut Greece more slack in their bailout deals. Many of the smaller parties want to tear up the agreements.
“After two years of barbarism, democracy is coming home,” said Alexis Tsipras, the head of the leftist Syriza party, expected to pick up about 10 percent of the vote. “The people will send a loud and clear message to all of Europe.”
Pasok head Evangelos Venizelos, a former finance minister who helped negotiate Greece’s second bailout earlier this year, was booed as he voted in his constituency in Thessaloniki, with one heckler shouting “thief.”
Greece’s creditors, not least paymaster-in-chief Germany, the main proponent of austerity before growth — despite growing criticism across Europe — have little appetite to loosen the bailout terms, let alone consider a third rescue.
With Athens having committed to finding next month another 11.5 billion euros in savings through 2014, any ambition to renegotiate terms “suggests a degree of liberty they do not have,” Swiss bank UBS said in a research note.
In ominous comments widely quoted by Greek newspapers on Saturday, German Finance Minister Wolfgang Schaeuble said that if Greece’s new government deviated from its commitments, the country would “bear the consequences.”
As a result, it is Greece’s vote rather than France’s presidential election, also to be decided yesterday, which “weighs heavier” on investors’ minds, Credit Suisse director of research Valerie Plagnol said.
Holger Schmieding, economist at Germany’s Berenberg Bank, said that with a “high” chance that no stable government willing to implement more reforms can be formed, there was a 40 percent risk of a Greek eurozone exit this year.
However, outgoing Greek Prime Minister Lucas Papademos, head of a Pasok-ND coalition since November, said as he voted in Athens that he expected a new government to be formed “this week.”
“We are all agreed that these elections are most crucial. Everyone has to make a decision, not just on who will govern, but on what path the country will take in the coming decades,” the former ECB vice president said.
With Portugal and Ireland getting aid, and Italy and Spain on shaky ground, too, last year there were worries of some sort of break-up of the eurozone. These fears have subsided, but have not completely disappeared.