Resigned to years of austerity, Greeks head to the polls

Resigned to years of austerity, Greeks head to the polls

For once, Greek politicians are not bearing gifts.

Six years into the country's worst post-World War II financial crisis, Sunday's early parliamentary election is not being fought over austerity, promised debt forgiveness, public sector jobs or tax breaks.

If anything, it's about the — dim — prospect of political stability that might help restore some kind of economic normality to a country with 25 percent unemployment, severe banking restrictions and a crippling public debt.

Both front-runners, the radical left SYRIZA party and the center-right New Democracy party, accept, with varying degrees of grace, the new tax hikes and reforms that international creditors have demanded to keep Greece afloat.

"Given that the (third bailout) has been voted by an overwhelming majority of members of the Greek parliament, there is nothing at stake in these elections," said Dimitri A. Sotiropoulos, assistant professor of political science at the University of Athens.

"(SYRIZA and New Democracy) will have very small room for manoeuver regarding policy measures," whoever wins, he added.

The to-do list was written in July, when former prime minister Alexis Tsipras, 41, performed a remarkable U-turn under duress, dumping the anti-austerity platform that brought him to power in January. As an alternative to bankruptcy, social meltdown and an exit from Europe's monetary and political union, he agreed to a third, 86-billion euro ($97 billion) bailout with tight strings attached — triggering a party revolt that cost him his parliamentary majority.

In what might prove a big miscalculation, Tsipras then called an election to boost his majority. Until July, SYRIZA was much more popular than New Democracy, whose ratings rose under interim leader Vangelis Meimarakis, 61. The gap has shrunk massively and an outright majority is out of either party's reach.

For a country that has seen four parliamentary elections and six governments since 2009, the main issue is whether the winner will be able to last significantly longer than the previous SYRIZA administration's seven months. Neither is within sight of the 151 seats needed to rule alone in the 300-seat parliament.

Most likely, a three-party coalition will be required — and should be quite easily achievable with help from two small centrist, pro-European parties. A total of nine parties could enter parliament in this vote, including the Nazi-inspired, ultra-right Golden Dawn party that came third in the last election and is still polling high.

J.P. Morgan analysts Malcolm Barr and Aditya Chordia said in a note that coalition talks may be difficult, but cannot take too long, as bailout creditors are to review the country's reform progress next month.

Over the next couple of months, Greece has to draft the 2016 state budget and a three-year fiscal strategy, double taxation on farmers, reform its pension system, merge all social security funds and privatize its electricity transmission system.

Also, by the end of the year, it must oversee a bank recapitalization program, without which depositors with over 100,000 euros ($113,000) in their accounts will be forced to chip in.

Megan Greene, chief economist at Manulife Asset Management, said there is little chance the immediate targets can be met.

"This means at some point, Greece and its creditors will end up back at the negotiating table wondering what to do about Greece being behind on its targets," she said, adding that new talk will arise of Greece possibly being forced out of the 19-nation euro currency club.

Greece has survived on international bailouts since 2010, when it lost access to bond markets after running — and keeping quiet about — a huge budget deficit.

SYRIZA's defection to the pro-bailout camp has taken much of the sting out of a debate formerly peppered with accusations of treason and kowtowing to creditors.

In past campaigns, Greek parties tried to entice voters by promising higher government spending, welfare handouts, subsidies, public sector jobs, tax rebates and cuts.

SYRIZA won in January on pledges to restore the minimum monthly wage to the pre-crisis level of 751 euros ($849) — from 485 euros ($548) — restore labor protection laws scrapped under the bailouts, raise pensions, negotiate an advantageous deal with creditors and get most of the public debt written off.

The new bailout deal makes this impossible, although Tsipras insists he can restore collective wage bargaining.

Tsipras promises to soften the pain from the inevitable new measures. Meimarakis has played the stability card, accusing SYRIZA of nearly obliterating the economy and dropping the ball on immigration — a record 260,000 asylum-seekers have entered Greece this year — and education, with many schools closed due to staff shortages.

One remaining advantage for Tsipras, despite his U-turn and signing of the third bailout, is that he is still considered the new kid in town. He has campaigned on the theme of new versus old, clean versus corrupt, the likable youngster against the cynical representatives of the old regime.

"I will vote for SYRIZA, because that's the only chance for this place to get cleaned up from the dirt that was established in 1974 by all the parties," said retiree Vassilis Betzelos.

"I will give a second chance to Mr. Tsipras," concurred tourism worker Despina Savvidou.

Teneo Intelligence analyst Wolfgango Piccoli said the campaign has highlighted both parties' "manifest inability to put forward credible policies," adding that the overall prospects are gloomy.

"In the best-case scenario, another phase of improvisation, hesitation, missed deadlines and much political wrangling will follow the calm of what has been a singularly apathetic election campaign," he said.

Polls indicate many of the 9.9 million voters remain undecided or may not vote at all.

Yannis Xerakias, an unemployed shipyard worker in the depressed Athens suburb of Perama, said Tsipras "proved to be a hot potato, just like the rest of them all of these years."

"As for what I'll vote for on Sunday?" he asked. "My bed. I will enjoy it."


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