Greeks vote for reform path or defiance

Greek voters are going to the polls today in an election that will determine whether the country that triggered the euro-area debt crisis five years ago holds to the path of economic reform or challenges its creditors and sets a precedent for all Europe.

The election contest pitches Prime Minister Antonis Samaras’s New Democracy against opposition leader Alexis Tsipras’s Coalition of the Radical Left, or Syriza. Tsipras has pledged to win a writedown of Greek debt and to abandon budget constraints that were imposed in return for aid, goals which Samaras says risk Greece’s expulsion from the euro area.

Governments from Berlin to Madrid by way of the European Union’s headquarters in Brussels are watching to see which argument prevails. With Syriza extending its lead in the final days of the campaign, polls suggest Tsipras’s message of change is resonating more with voters wearied by the Greek economy’s contraction by a quarter and record unemployment.

“The question now is not if Syriza manages to win the elections but whether it will be able to secure an outright majority in the Parliament,” analysts at Axia Ventures Group Ltd led by Constantinos Zouzoulas wrote in a note to clients. While a high proportion of the electorate remained undecided until the eve of the election, “the majority of these voters could end up supporting the perceived winner, therefore giving Syriza a wider victory than polls suggest,” they said.

Election Messages

Both leaders stressed the European dimension of the choice facing Greeks as they cast their own votes. Samaras put his faith in a last-minute surge in support for New Democracy, saying those voters who were undecided until Election Day will determine the result.

“I am optimistic because I believe that no one will endanger the European course of our country,” the prime minister said after voting in the town of Pylos in southwestern Greece.

Tsipras said the vote was a choice between continuing to be cowed by the diktat of the so-called troika of international creditors or Greeks reasserting themselves, “as the people deserve.” The election will decide “whether from tomorrow we will claim with tough negotiations our return to Europe,” he said after casting his vote in the central Athens district of Kipseli.

Polls opened at 7 a.m. Athens time and will close at 7 p.m. An exit poll will be released after 7 p.m., with a first official projection based on partially counted ballots due at about 9.30 p.m. A total of 9.8 million citizens are eligible to cast ballots, more than a third of them concentrated in the Attica metropolitan region, which includes the capital, Athens.

Market Rally

Final opinion polls showed Syriza ahead of New Democracy. A GPO poll for Mega TV released late Friday put support for Syriza at 33.4 percent compared with 26.7 percent for New Democracy. The nationalist Golden Dawn placed third with 5.1 percent, followed by Samaras’s junior coalition partner, Pasok, and To Potami, or The River, tied with 5 percent backing each. GPO polled 2,000 people between Jan. 20 and Jan. 23. No margin of error was given.

Bonds and stocks rallied in Athens on Friday, the last trading day before the vote, as the European Central Bank’s new bond-buying program offset investor concerns at the election outcome.

The Athens Stock Exchange rose 6.1 percent, erasing this year’s losses that had reached 4.2 percent through Jan. 22 on concern that the vote will endanger Greece’s 240 billion-euro ($269 billion) bailout. The yield on Greece’s 10-year bond dropped 56 basis points to 8.41 percent.

Warnings, Solidarity

European policy makers including German Finance Minister Wolfgang Schaeuble and his Dutch counterpart, Jeroen Dijsselbloem, who chairs meetings of finance heads from the 19 countries that share the euro, warned Greece against diverting from its agreed bailout program. Spanish Prime Minister Mariano Rajoy, who faces elections at the end of 2015, visited Athens this month to show solidarity with Samaras.

Forces opposed to fiscal tightening have rallied to Tsipras’s side. Pablo Iglesias, the leader of Spain’s Podemos party, joined a Syriza rally in Athens on Thursday, while Sinn Fein leader Gerry Adams in Ireland called to wish Tsipras luck.

Samaras, addressing his final rally in Athens on Friday evening, said the “Tsipras accident” will not come to pass.

“We were one step away from sealing the deal with our creditors and will finalize it by the end of February,” he said. “Greece is exiting the bailout and will not need more loans.”

Tsipras told reporters the same day that an historic triumph for his party would mean no bailout memoranda, no more creditors, no Samaras and an end to the political forces that committed the Greek people to a “destructive path.” Addressing a closing rally on Friday evening in the city of Heraklion on the island of Crete, he said it was time for Syriza to look after Greece.

“Syriza is the sole force of stability,” he said. [Bloomberg]