Greek Prime Minister Alexis Tsipras’ left-wing party, Syriza, lost a lot of ground, both in European Parliament elections and in local elections over the weekend. Immediately following the results, he called for snap elections. This means that instead of elections occurring as scheduled in October, voters will be heading to the polls in mere weeks – on July 7th, in what is seen as an attempt to lose the incumbent party’s losses to the opposition.
Official results showed the conservative opposition party, New Democracy, over 9 percentage points ahead of Syriza – meaning a win off 33 percent to Syriza’s 24. After early exit poll results on Sunday, Tsipras said he would visit the Greek president after the second round of local elections on June 2nd to discuss the early dissolution of Parliament, and thus trigger national elections.
“I will request immediate declaration of national elections from the President of the Republic”, Tsipras said in a speech.
New Democracy leader Kyriakos Mitsotakis, had also called for new elections and for Tsipras to resign, saying that the European elections and local elections prove that Greece is undergoing a wholesale change. Mitsotakis pledged to offer tax breaks for property owners, and provide families with more financial leeway. “The Prime Minister must assume his responsibilities. For the good of the country, he must resign, and the country should hold national elections, the soonest possible”, he added.
How Syriza Lost
The compromise deal Tsipras negotiated with neighbouring state North Macedonia over the latter’s name, has been attributed, in part, with the party’s loss. Panos Kammenos of the right-wing Independent Greeks tweeted “Syriza committed suicide over [the] Prespes” deal – the deal that cemented the new name for North Macedonia. Nationalist anger ran high in both states as a result – and was expressed at the ballot box.
The results are a blow to the party that rose to prominence in 2015, campaigning on repealing austerity measures that were imposed during the international bailout in the midst of the financial crisis. But in the end, more austerity measures were imposed instead. The economy did improve under Syriza, but recovery has been slow. Under Tsipras’ leadership, Greece was able to keep on top of its payments to its creditors – mostly other European states – and regain market trust. But this came at the cost of high, long-term unemployment rates and slow growth. The economy grew by less than 2 percent this year, and is likely to do similarly in 2019. So many people remain frustrated.
Speaking with Al Jazeera in Athens, fishmonger Thanasis Kazlaris said “I see conditions in the market. When you cut people’s pensions and squeeze them economically, I see a fall in sales. The taxes don’t help. Sales tax had gone up a lot.”
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.
“Taking into account the policies they have been implementing for four years, [Syriza] did pretty well”, said Panos Polyzoidis, a political observer and analyst. “They have not vanished as other parties have vanished”, he said, referencing The River, a centre-right reformist party, as well as the Centre Union, a populist party, and the nationalist Independent Greeks party – Syriza’s erstwhile coalition partner. None of the parties won seats in the most recent election, and the Independent Greeks party is unlikely to survive the next election altogether.
“This will be a springboard for New Democracy. It could build on that spectacular victory and possibly even flirt with an absolute parliamentary majority.”
Nikolaos Nikolaidis, a lawyer with connections to the conservative party, said “What made the difference was that New Democracy pulled voters from other parties, and especially Syriza. 15 percent of Syriza’s 2015 voters went to New Democracy. And I don’t think it has exhausted the potential there.”
Just before the election, Tsipras brought a series of relief measures before Parliament, and all but dared the opposition to vote against them. In return, they accused him of making a last-minute gambit for votes. Tsipras had described the choice Greeks face, as one between emerging permanently from the bailout, or “returning to the darkness of austerity, the darkness of the crisis, of the oligarchs and the International Monetary Fund”.
“Tsipras’ handouts acted as a boomerang,” said Nikolaidis. “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.”
Speaking after the election, Tsipras said “The electoral result (…) is not up to our expectations. I will not escape or run away, or quit the fight.”
“For four years now we’ve run a course with unprecedented difficulties for the country’s political history. We went against the current”, he said on Sunday. “We didn’t hide. We told the truth to the Greek people. We will tell the truth now too.”
Syriza didn’t bear the loss alone. Syriza’s former coalition partner, the Independent Greeks, and the far-right party Golden Dawn also lost seats. The Independent Greeks’ support hovered at 0.8 percent, landing them in fifteenth place, while Golden Dawn lost more than four percentage points, with 5 percent of public support, leaving them in fifth place. This leaves them with two seats in the European Parliament, instead of three.
If he takes power after the next election, Mitsotakis plans to unfurl a new economic plan that hinges on negotiating a new deal with Greece’s creditors. Such a deal would allow him to spend less on repaying debt, and keep more money in Greece to reinvest in the economy.
Speaking last September, Mitsotakis said “all the other countries that underwent crises have made it”.
“Some, like Portugal, Spain, and Cyprus, are growing at 3 or 4 percent,” he said. “Others, like Ireland and Romania, at 6 or 7 percent. What do they have that we don’t? (…) Nothing we can’t do too, if we decide to do it and make the effort.”
Markets React Positively
The markets took the news of snap elections well. The stock market opened up 5 percent, with early trading with banks driving the gains, and made further advances throughout the day, closing at 6.1 percent. Shares of Eldorado Gold rose as much as 14.6 percent. Yields on Greek bonds also narrowed, as the ten-year notes fell 34 basis points, hitting a record low.
Many citizens also had hopes that the early elections would reduce the uncertainty that was negatively affecting business. “It was the best thing for Greece, I believe, because since January, there was no work at all. And that’s very bad”, said Paraskevas Stamatiadis, an Athens goldsmith. “Let’s get elections over with.”
“A political shift to a more pro-business climate has potential positive implications for the company’s outlook in-country”, Josh Wolfson, an analyst at Desjardins, wrote in a note.
“The market will now cheer a clear New Democracy win, hoping that a new administration will tilt the fiscal mix towards a more growth-friendly manner, and be much better at attracting investment, including much-needed foreign direct investment,” said Thanassis Drogossis, head of equities at Athens-based Pantelakis Securities, in a note to clients.