Greek election rage endangers bailout

DINA KYRIAKIDOU AND HARRY PAPACHRISTOU
Last updated 09:57 07/05/2012

Greek voters are expected to punish the two major political parties, both of which supported the bailout when they head to the polls on Sunday. Deborah Gembara reports.

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Greek voters enraged by economic hardship have mauled traditional ruling parties in an election, putting the country's future in the euro zone at risk and threatening to revive the region's debt crisis.

The latest official results, with over 50 per cent of the vote counted, confirmed projections showing the only two major parties supporting an EU/IMF bailout that keeps Greece from bankruptcy would struggle to form a workable coalition.

Conservative New Democracy and Socialist Pasok, who have dominated Greece for decades, were holding less than 35 per cent of the vote. That would likely give them under the 151 seat threshold needed for even the most fragile majority in parliament.

Once mighty Pasok looked set to be pushed into third place by the anti-bailout Left Coalition party, in a stunning vote against austerity policies that have caused deep hardship in one of Europe's worst postwar recessions.

New Democracy was polling just over 20 per cent and Pasok a humiliating 14 per cent with the Left Coalition on 15.8.

In the previous election in 2009, Pasok won a landslide victory with 44 per cent and the Left Coalition had just 5 per cent.

"I cannot take it anymore, living as beggars in our own country. The Left Coalition can shake them up, and wake them up," said Kate Savvidou, 65, a pensioner who deserted Pasok.

Left Coalition leader Alexis Tsipras, at 37 Greece's youngest political leader, hailed a peaceful revolution and said German Chancellor Angela Merkel should understand that austerity policies had been defeated.

"Greek people gave a mandate for a new dawn with solidarity and justice instead of barbaric bailout measures," he said.

In another indication of the extent of public anger, the extreme right Golden Dawn party was poised to take nearly 7 per cent of the vote. This would allow such a party to enter parliament for the first time since the fall of a military dictatorship in 1974.

New Democracy leader Antonis Samaras called for a pro-European national salvation government that would keep Greece in the euro zone. Pasok leader Evangelos Venizelos also called for a unity government, saying his party had paid the price for handling the sovereign debt crisis.

But the small parties who gained in the election are all against the bailout, while being too divided to form an alternative coalition.

If the results are confirmed, the election could plunge Greece into new political turmoil, reigniting a euro zone debt crisis first detonated by Athens in 2009, and starting it down a path that could take it out of the euro.

FRAGMENTATION

Several analysts said the unprecedented fragmentation of the vote could bode weeks of instability and force another election.

But a New Democracy source said the party would not ask for repeat elections if it finished up as the largest party.

"This election was suppose to punish major parties and if they didn't manage to get a majority it was a punishment vote indeed," said Blanka Kolenikova of IHS Global Insight.

Greeks angry at record unemployment, collapsing businesses and steep wage cuts seemed to ignore warnings that a vote against the harsh terms of the bailout would push Greece towards bankruptcy.

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"The exit polls confirm what has been patently clear for some time: there's no political consensus for the kind of reforms that Greece must implement if it wants to remain in the euro zone," said Nicholas Spiros of Spiro Sovereign Strategy.

Othon Anastasakis, director of southeast European studies at Oxford University told Reuters: "Greeks are sending a very strong message abroad, which is enough with austerity."

As they voted, many Greeks expressed their rage at the parties who accepted the harsh conditions of two bailouts that have kept the country from bankruptcy.

"My vote was a protest vote because they cut my pension," said 75-year-old pensioner Kalliopi, her fists clenched in anger.

"I live in a basement but pay the same (property) tax as someone who lives in a penthouse," said Kalliopi after voting.

"I voted for Left Coalition, even if this means elections again in a month. I feel vindicated, things are changing little by little because people decided to speak up," said 22-year old student Klelia Avgerinopoulou.

THREATS IGNORED

International lenders and investors fear success for the small anti-bailout parties could lead to Greece reneging on the harsh terms for the programme, risking a hard sovereign default and dragging the euro zone back into the worst crisis since its creation.

Euro zone paymaster Germany has warned there would be "consequences" to an anti-bailout vote and the EU and IMF insist whoever wins the election must stick to austerity if they want to receive the aid that keeps Greece afloat.

But many voters shrugged off such threats and Socialist Francois Hollande's victory in France's presidential election may have boosted chances of a broad pushback against German-led austerity in Europe.

"I don't think that voting for a small party will make us go bankrupt. We already are," said 53 year-old Panagiotis, a craftsman, after voting for the conservative Independent Greeks.

Greece faces an acid test as soon as next month when it must give parliamentary approval for over €11 billion (NZ$18b) in extra spending cuts for 2013 and 2014 in exchange for more EU/IMF aid.

That looks like a tough task even if a new government can be formed in time, given the success of anti-bailout parties.

Under the constitution, Greek President Karolos Papoulias will give the biggest party after the election three days to form a government. If it fails, the next largest group gets a chance and so on down the line. If they all fail, new polls would be called in about three weeks.

- Reuters

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