Greece’s election shocker
Last weekend was an exciting one for Europe-watchers, with two hugely important and potentially transformative national elections in France and Greece. There has been a lot of analysis of Francois Hollande’s victory in the French Presidential election, and what that portends for the future of crisis management in the euro zone. We have discussed this issue previously here and here, and will do so in the future as a better picture emerges of Hollande’s stances toward the EU fiscal compact, the Franco-German relationship, and a host of other issues.
Perhaps the more shocking, if not somewhat expected, events transpired in Greece on Sunday. In elections to the Greek parliament, the two leading parties, the center left PASOK and the center right New Democracy (ND), combined for just barely over 30% of the vote. The magnitude of the party system’s collapse can be seen by comparing these results with the 2009 election, in which PASOK and ND combined for over 75% of the votes and over 80% of the seats. Indeed, the two parties have been the cornerstone of the Greek party system since the country emerged from military rule in 1974. PASOK’s 13.2% did not even place it among the top two vote-getters.
The collapse of the leading parties’ support coincided with major electoral gains by fringe parties, some of them new. The biggest gain was experienced by the Coalition of the Radical Left (Syriza), which surged from 4.5% of the vote in 2009 to a second place 16.8% on Sunday. As its name suggests, Syriza is a left wing party that is adamantly opposed to the terms of the financial bailout under which Greece pledged to undertake severe austerity measures. Even more shocking, the far right Golden Dawn party earned 21 seats in the new parliament. Golden Dawn has played on rising anti-immigrant sentiment and also opposes what it denounces as the foreign-imposed bailout package. Golden Dawn party members reportedly enact their own vigilante justice, forming squads to maintain neighborhood security and to evict immigrant squatters from empty apartments. Party militants have been accused of violent attacks on suspected immigrants. Party leader Nikos Michaloliakos can often be seen surrounded by beefy bodyguards; at his first post-election press conference, his muscular entourage made journalists rise to their feet when he entered as a sign of respect.
Altogether, parties opposed to the bailout package earned 151 seats in the 300 member parliament. Despite stern admonitions from EU and European officials that no renegotiation of the package is possible, the electoral shock clearly throws everything into doubt. The most pressing item on the agenda right now is the formation of a majority coalition, but given the breakdown of seats between the various factions, it is impossible to see how such a coalition might be cobbled together. ND, the largest vote-getter at 18.9%, got the first crack at forming a coalition; it reached out to the Democratic Left, which despite its public opposition to the bailout was seen as the least radical of the left parties, but was rebuffed. The torch then passed to Syriza to give government formation a try; although the Democratic Left expressed its willingness to join a Syriza-led coalition, the Communists, who picked up 26 seats, have refused. (See here for a useful chronology of events since the election.) The two radical right parties that entered parliament, Golden Dawn and the Independent Greeks, are seen as political poison and are unlikely to be asked by any of the mainstream or leftist parties to enter a coalition.
So where does that leave things? One possibly that is looking more and more likely is a new election. But unless public sentiment radically changes in one direction or the other in the next few weeks, it is hard to see how a new election would return results that would be more conducive to a majority coalition. And even if it did, it is doubtful whether that coalition would be more favorable to implementation of the EU-mandated austerity program. For those wondering how events within Greece will transpire, and how the EU will react, this is somewhat uncharted territory.