The Greek elections

A long and tortuous road

Ten years ago, Greece shocked Europe and the world with the revelation about the dire situation of its public finances – until then concealed. The country became the trigger for the Eurozone crisis, as well as for long overdue institutional changes in the euro area. Three bailouts later, the twin internal and external Greek deficits have been tamed, and many (though not enough) reforms have transformed the country. But the toll has been heavy: a recession which can find a parallel only in the US Great depression, record unemployment, and increased poverty. This hardship made Greece the first country in Europe to elect a populist party – radical left Syriza – to power, riding on the hopes and fears of austerity-exhausted Greeks, and in the process go through a near-death experience in 2015, almost skidding out of the Eurozone. Since the 7 July elections, Greece is also the first to turn the page and revert to mainstream parties of government.

A clear election result

With near 40% of the popular vote, right-of-center New Democracy obtained an absolute parliamentary majority in Greece’s electoral system. This widely expected victory owes more to its new liberal leader, Kyriakos Mitsotakis, than to the still largely unreconstructed party he leads. Syriza was punished in the polls for not having delivered on its (impossible) promises, for its often-incompetent handling of crises, and for adopting some of the worse clientelist practices of its predecessors. But it has proved surprisingly resilient in defeat, down only a few percentage points from its 35% score in 2015, after completing a full and difficult term, characterized by a major policy U-turn and the signing of the country’s third and last bailout. It will undoubtedly continue its transformation into a more moderate party and vie to represent the center-left, replacing the erstwhile dominant socialists (ex-Pasok) which remain in single digits. Meanwhile, the best news of this election was that the violent neo-Nazi Golden Dawn party failed to clear the threshold for entering parliament.

The new government

With no transition period provided for in the Greek constitution, and with the election having produced an absolute parliamentary majority for the winning party, the change of guard in Greece was swift. The new Prime Minister was sworn in one day after the election, and his ministers one day after that. In forming his government, Mitsotakis assembled a team of (mostly younger) politicians mixed with technocrats who are meant to bring much-needed skills in key areas, with the intention to force change in a notoriously inflexible and ineffective Greek public administration. He has also reached beyond his own party, appointing people who have served in past center-left governments, while signaling a more managerial and less ideologically oriented style of governing, and with an emphasis on digital transformation. But some cabinet appointments reflect internal party balances rather than competence; with 50 ministers and deputies, it is also too large as a government formation, which may prove unwieldly, while it includes a disappointingly small number of women.

A difficult agenda

Competence and a new approach will certainly be needed in order to address the many challenges Greece continues to face. First among these is the economic and social agenda, where the new government will have to reconcile its promised tax cuts with the high fiscal surplus required of it by its EU creditors. It will need to do so while rekindling stalled structural reforms and attracting much-needed foreign investment to disprove the anemic medium- and long-term economic growth projections, and at the same time prove to citizens that it can improve public services which have been decimated by the crisis. Next is a law-and-order agenda, where it will have to find the difficult balance between restoring a sense of security to citizens (ranging from crime to lawlessness on the streets to dealing effectively with natural disasters) without trampling on individual and social freedoms. Handling migratory flows by providing more humane conditions than currently but also in an effective manner will be an important policy test. Last but not least, foreign policy, where the New Democracy stance opposing the landmark deal with North Macedonia concluded by the Syriza government has marginalized it in Europe, but where tensions with Turkey will be by far the most important threat.

Drawing lessons and looking ahead

Beyond the immediate steps of a new government, the Greek election results offer some broader lessons which go beyond Greece. Here are a few:

• The rise of populist parties across Europe is neither inexorable, nor immutable in time. It reflects real economic and social, and often cultural, underlying problems; but if/when such parties reach a position of power, they eventually have to face the reality of difficult political and policy choices. Their support will then tend to falter, but they can remain a potent force if/when they evolve and moderate their positions.
• At European level, the crisis has shown that citizens (even in countries that bore the brunt of the adjustment) remain attached to the European project, as well as to the common currency, proving that defending the integrity of the Eurozone was the right thing to do. But such support is conditional on European institutions and the stronger governments pursuing the necessary institutional reforms and showing to citizens that integration is not a “winner takes all” affair.
• At national level, voters respond to a combination of competence in governing and a convincing political narrative. The two however are not always easy to combine. The former requires evidence-based policy-making, effective policy tools and fairness in delivering structural reforms which all economies need. The latter can easily degenerate into easy but impossible to keep promises; managing a political narrative which maintains public support for often difficult policy choices is what makes for successful politics.

 

Professor George Papaconstantinou leads the Transformation of Global Governance project at the EUI’s School of Transnational Governance. An economist, he is former Finance Minister and Former Minister of Environment and Energy for Greece. He is the author of Game Over: The Inside Story of the Greek Crisis. His new book Whatever It Takes: The Battle for Post-Crisis Europe is forthcoming in the autumn.