Tuesday, 28 May 2019

Greek conservative party well placed ahead of snap election

This article was published by Al Jazeera International.

Kyriakos Mitsotakis greets supporters in Thessaloniki, on his final campaign speech for the European party election on May 24.

ATHENS - Greek voters punished the ruling Syriza for broken promises in Sunday’s European Parliament election. Conservative New Democracy’s nine-point lead over Syriza was so devastating, Prime Minister Alexis Tsipras announced that he will call a snap general election at the end of June, four months early. “The result… is not up to par with our expectations,” Tsipras said.

Tsipras was referring to more than a billion dollars’ worth of handouts he had announced three weeks before, in the form of a halving of sales tax in supermarkets and restaurants, and a bonus pension. Voters were not taken in.

“Tsipras’ handouts acted as a boomerang,” says Nikolaos Nikolaidis, a lawyer with good connections inside the conservative party. “If you look at how pensioners voted, the bonus pension was more of an annoyance. It reminded them of all that had been taken away in previous years. It was also announced just before the election and was clearly connected to it.”

Greece lost a quarter of its economic output during its eight year depression. Unemployment peaked at 28 percent in 2013 and remains at 19 percent. Economists record it as the worst contraction of any developed economy since World War Two. And although a recovery did begin under Syriza, it has been weak. The economy grew by under two percent last year, a performance it is set to repeat.

“I see conditions in the market. When you cut people’s pensions and squeeze them economically, I see a fall in sales.,” fishmonger Thanasis Kazlaris told Al Jazeera as he shoveled whitebait into a paper cone for a customer. “The taxes don’t help. Sales tax had gone up a lot.”

In the same central Athens farmers’ market, chicken farmer Angelos Mavroeidis was unsurprised by the result. “I haven’t gone to university. I’ve only done high school. There are economists who know these things better. Something has to happen. We have to have an economy like America’s, like Australia’s, like Britain’s. These aren’t things that have to be reinvented,” he said.

Last year’s Prespes Agreement, whereby Greece recognised its northern neighbour as North Macedonia, also undercut its popularity because it recognised a Macedonian language and ethnicity. In the northern Greek provinces of Macedonia, Thessaly and Epirus, New Democracy won simultaneous elections for regional prefects in the first round.
Kostas Karamanlis (C), former conservative prime minister and honorary New Democracy chairman, listens to Kyriakos Mitsotakis speaking in Thessaloniki on May 24.
A series of unfortunate events

When Greeks elected the Radical Leftwing Coalition, or Syriza, in January 2015, the party promised to end austerity and rip up Greece’s onerous agreements with its creditors. Instead it succumbed to a third bailout loan which carried further cuts to pensions and higher taxes.

Syriza managed the economy with high taxes and high surpluses. It managed to keep up payments to its creditors – who are chiefly its Eurozone partners - and regain market trust, graduating from Greece’s eight-year fiscal adjustment programme last year. But this came at the cost of low growth and stubbornly high unemployment.

The result was a complete reversal of European elections in 2014, when the ruling conservatives saw Syriza surge four points ahead of them. Now, as then, the EU elections have acted as a weathervane, showing who is coming to power next.

“Taking into account the policies they have been implementing for four years, [Syriza] did pretty well,” says Panos Polyzoidis, a seasoned political observer and analyst. “They have not vanished as other governing parties have vanished.”

Polyzoidis was referring to The River, a centre-right reformist party, the Centre Union, a rightwing populist party, and the nationalist Independent Greeks party, Syriza’s erstwhile coalition partner. None won any seats in this election and are unlikely to survive the next general election.

New Democracy’s high score of 33,24 percent of the vote suggests that it might polarise more of its voter base in the coming month. It would need about 40 percent to rule without a coalition partner.

“This will be a springboard for New Democracy,” says Polyzoidis. “It could build on that spectacular victory and possibly even flert with an absolute parliamentary majority.”

“What made the difference was that New Democracy pulled voters from other parties and especially Syriza,” says Nikolaidis. “Fifteen percent of Syriza’s 2015 voters went to New Democracy. And I don’t think it has exhausted the potential there.”

New Demoacracy leader Kyriakos Mitsotakis has promised a restart to the economy. He would lower tax on businesses from 29 percent to 20 percent in two years. He would lower income tax on farmers from 22 percent to 10 percent.

He also says he will seek to create 700,000 new jobs in five years and has pledged to bring home at least half a million of the 860,000 skilled workers who, according to the Hellenic Statistical Service, have left the country since 2009.

“The whole scenario of lowering taxes and social security contributions, and increasing wages - that is all founded on the assumption that the economy will achieve an annual growth rate of four percent,” says Polyzoidis. “Personally I see that as difficult.”

Mitsotakis’ economic plan largely hinges on a key promise to negotiate a new deal with Greece’s creditors. That would allow him to spend less on repaying external debt, and keep more money in the economy for reinvestment. Mitsotakis has repeatedly said he is able to deliver on this.

Envisioning "a Greece secure, extrovert and prosperous" last September, Mitsotakis said, “All the other countries that underwent crises have made it. Some, like Portugal, Spain and Cyprus, are growing at three or four percent. Others, like Ireland and Romania, at six or seven percent. What do they have that we don’t?... Nothing we can’t do too, if we we decide to do it and make the effort.” 

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