Greeks march back to the ballot box after failed outright result

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Athens: Prime Minister Kyriakos Mitsotakis didn’t just defy the pollsters with his landslide election victory in Greece on Sunday. He also bust open the constraints that his main political opponent had tried to place on him.

Mitsotakis defeated his leftist opponent Alexis Tsipras, but he also outmanoeuvred the far more powerful version of Tsipras’s Syriza party from 2015.

Greek PM Kyriakos Mitsotakis, leader of New Democracy party, speaks to supporters outside the party’s headquarters in Athens following the general election on Sunday.Credit: Bloomberg

Back then, Syriza brought Greece close to being kicked out of the euro, and a year later changed the electoral law to prevent parties like Mitsotakis’s New Democracy from winning majorities.

Tsipras had argued that a proportional system that pushed parties into coalitions was more democratic. But with 41 per cent of the vote compared to about 20 per cent for Syriza, Mitsotakis has signalled that he’s not interested in an electoral pact and instead will look to press home his advantage with a fresh ballot.

“New elections should be held as soon as possible,” he said, touting June 25 as a potential date.

Ahead of the vote, New Democracy had been polling in the mid-30s.

Investors are pricing in a clear victory for 55-year-old Mitsotakis in the second ballot that should deliver an absolute majority and a clear mandate to continue his program of economic reforms.

The benchmark Athens Stock Exchange General Index jumped to its highest level in almost a decade while the yield on Greece’s 10-year bonds dropped by 14 basis points to 3.877 per cent. That was the lowest since December and underlined the disconnect between Greece and Italy, another weak spot in during the euro crisis of the previous decade.

Sunday’s election was the first and only one to be held under the system that Tsipras introduced that effectively meant that a candidate needed around 48 per cent of the vote to form a majority.

Presidential guards perform the Changing of the Guards in front of the Greek parliament building in Syntagma square in Athens, Greece, on Monday.Credit: Bloomberg

A second ballot — and future Greek elections — will award a bonus of as many as 50 seats to the winner, lowering the threshold for a majority to about 38 per cent under certain conditions.

The prospect of Mitsotakis claiming a strong mandate for his second term sets Greece apart from most of its neighbours, who’ve seen allegiances fragment during a decade that’s included a financial crisis, a pandemic and the return of war in Europe.

Spanish Prime Minister Pedro Sanchez leads a minority coalition dependent on ad hoc alliances to pass legislation. Prime Minister Giorgia Meloni needed a three-party coalition to claim power in Italy after emerging from the political fringes. Even in Germany, where coalition building is part of the political fabric, Chancellor Olaf Scholz is leading the first three-party government in more than half a century.

A television displays Alexis Tsipras, leader of Greece’s Syriza party, delivering a concession speech on Sunday.Credit: Bloomberg

France’s presidential electoral system makes President Emmanuel Macron something of an outlier among Europe’s biggest economies, although even he lost his parliamentary majority at the start of his second term.

“New Democracy is the largest centre-right party in Europe,” Mitsotakis said after his victory.

Voters were particularly focused on Greece’s economic transformation, which has seen gross domestic product recover to just about where it was when the country lost the ability to repay its debt in 2010. Unemployment has more than halved from its peak of 28 per cent and stocks and bonds have soared.

The election shows that many people just want that to continue.

They want a government that can stick to the sustainable fiscal path Greece had followed before the pandemic and keep taking full advantage of European Union funds that are helping to boost growth.

And that means a majority for Mitsotakis.

Bloomberg

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