Greek election looks set to strengthen PM Mitsotakis’ power

ATHENS — Greece’s conservatives are set for a resounding victory in Sunday’s elections with leader Kyriakos Mitsotakis destined to return to the prime minister’s office in a far stronger position to advance investor-friendly reforms.

After heading to polls on May 21, Greeks will now do it all over again. New Democracy last month notched up a double-digit lead over its main rival, the left-wing Syriza party, but fell short of achieving an outright majority. This time, a new electoral system will reward the leading party with up to 50 bonus seats. POLITICO’s Poll of Polls puts the backing for New Democracy on 42 percent support, more than twice the support for Syriza on 20 percent.

“Mitsotakis will be dominant with a comfortable majority,” said Petros Ioannidis, political analyst founder of the firm About People. “Usually when you win elections for the first time you have a honeymoon period, in the second term you don’t. The paradox here is that, because the opposition has been wiped out, Mitsotakis has a new honeymoon period.”

Greek bonds and stocks have rallied in the past weeks, reassured that a pro-investment government will prevent any backsliding to the dark days of the eurozone debt crisis. As his next steps, Mitsotakis is pledging to slice back the bloated public sector even further, and reform the health and education sectors.

“Mitsotakis is in charge and potentially for the first time is solid in control of his own party,” said Wolfango Piccoli, co-founder of risk analysis company Teneo.

Even though Sunday’s winner is already certain, big questions remain over the scale of the conservatives’ majority and the fate of the devastated opposition parties on the left that will be less able to hold the government to account.

Risk of hubris

The big story behind New Democracy’s emphatic victory is the collapse in support for Syriza, which has seen its vote plummet, raising questions about whether its status as the main opposition could now be challenged by the socialist Pasok party.

What is clear is that opposition parties will be in disarray in the next parliament.

“Hubris might kick in after such a victory,” said Piccoli. “The opposition is extremely weak, and it will take a very long time to recover. The PM will have to pay attention to this aspect, because we have seen in other countries that a weak opposition could become a problem for the government, for the quality of policymaking for accountability and transparency.”

Being so dominant now leaves Mitsotakis no excuse and expectations are also very high, he added.

Syriza leader Alexis Tsipras still appears saddled with the tumultuous first months of his leadership in 2015, at the height of the financial crisis, which led to Greece’s third international bailout program. Despite New Democracy being burdened with a spying scandal, spiraling inflation, mounting concerns over the rule of law, and the handling of a deadly train crash, Syriza’s pre-election campaign was vague and failed to capitalize on the government’s weak spots.

“Syriza bet on anger and after so many years of financial crisis and pandemic, people wanted to feel stability,” said Ioannidis, adding that Mitsotakis’ big win is mainly due to the bad performance of Syriza.

“I don’t particularly see people having expectations at the moment from politics in general, let alone high expectations from the government,” he continued. “It is evident that the party identifications of voters are too loose, votes are on loan. The first crucial test for the government will be the next European elections in a year.”

Out of the danger zone

Greece is soon expected to finally regain investment grade status, more than 12 years after losing its rating, marking an end to the dark days of financial crisis.

“Investment grade has been priced in for some time, but it’s powerful in terms of turning the page, moving away from the old bad memories,” said Piccoli. “It’s good news for the banks and for also borrowers because it should help to reduce the cost of financing and it would be interesting to see whether the government will be able to exploit this.”

But Greece is still struggling with many of the weaknesses that have weighed on growth for decades, including a massive bureaucracy, especially in the legal system, and chronic tax evasion.

Nikos Vettas, the head of the Athens-based IOBE think tank, sees two challenges ahead for the government: “One cannot exclude turbulence from the external environment, as other countries in the eurozone are under pressure, and some of the reforms needed domestically may not be easy and will require careful planning and determination.”

He added the government needed to maintain systematic primary surpluses — spending less than it gets in tax — and that there has to be a continued push towards attracting investment and modernizing parts of the public sector.

Piccoli zeroed in on the sectors where reform was needed.

“We haven’t seen much in the last years, obviously the pandemic dragged the process, but there is a bad need for the reform of the judiciary and the education sector in Greece. Mitsotakis should move quickly on that front before political capital is spent.”

The fringe factor

With the mainstream parties more or less maintaining the support levels they got on May 21, it seems as if Sunday’s elections will give another chance to fringe parties from the far right and the far left.

Greece’s next parliament could have as few as four and as many as nine parties. These include two parties on the far left: ‘Course for Freedom’ and ‘MeRA25’, led by former Syriza officials

On the right, vying for the ultra-nationalist, anti-migrant vote is the religious, pro-Russian, anti-abortion ‘Niki’ and the also pro-Russian ‘Greek Solution.’ A last-minute contender is the ‘Spartans’ party, which recently added a jailed MP from the neo-Nazi Golden Dawn party, Ilias Kasidiaris, to its list of backers and saw its support rise to more than 2 percent within days.

Three percent is the threshold for entering parliament.

During the past few weeks of campaigning, Mitsotakis has moved to wrest support away from these parties and bolster the conservatives’ vote among nationalists with its messages aimed to attract religious voters, focusing on the Peloponnese and northern Greece where these parties are more powerful.

“Having many extreme voices in parliament does not necessarily mean polyphony, but perhaps the opposite, leading to a democratic cacophony, a brake on results and creation,” he said during a speech in the northern city of Thessaloniki on Wednesday.

While these parties are unlikely to pose a threat to New Democracy, they will likely prove a pest if they are in parliament and would sap the party’s dominance.

“If these fringe parties enter the parliament it will be a problem for democracy,” said Vasiliki Georgiadou, politics professor at Panteion University. “It will change the mechanics, the way the political system works, because it will be taking into account what is happening in the far-right. Populist voices, voices against an agreement between Greece and neighboring North Macedonia, the anti-migration voices will be stronger and there will put more pressure on the government.”