A general election was held in Greece at the weekend which saw the ruling Syriza party (a coalition of the left) emerge as the largest group with 145 seats in the 300 seat parliament. It is likely to form a coalition with the Independent Greeks party, a nationalist grouping which won 10 seats.
The snap election (the second general election this year) was triggered when the Syriza leadership secured a putative third bailout from Eurozone nations, worth some €85 billion. The bailout was secured a few weeks after Syriza held a snap referendum in which 60% of voters rejected the financial assistance offer already on the table in Brussels. The decision led Greece to impose draconian bank withdrawal conditions on Greek citizens as the nation stared into the abyss of being forced to abandon the Euro. Mr Tsipras faced a rebellion from about 25 members of his party, which subsequently spilt to form a separate party. Tsipras was left without an effective majority and chose to go to the people.
In Sunday’s election, the Syriza splinter party failed to get any of their 25 MPs re-elected, so Mr Tsipras’s position has been strengthened by the elimination of some of his harshest critics from within the folds of his own party. His vote held up very well, retaining 145 of his original 149 seats. However, the turnout was low with approximately 56% of those eligible to vote bothering to do so. That level of participation is the worst in recent Greek history.
The second largest party that emerged from Sunday’s election was New Democracy with 28% of the vote, compared to Syriza’s 35%.
The immediate challenge facing the new government will be to obtain final agreement with its creditors to ensure that Greece gets the third bailout. This involves contentious pension cuts, tax increases and liberalisation of some protected professions. Eurozone officials will review the progress of the reforms required as a pre-requisite for the third bailout in Greece next month.
Probably, many of Greece’s national government partners would have been hoping that the election would return a more centrist government to power, one less implacably opposed to austerity and the reforms required as conditions of Greece’s three bailouts, but Syriza seems to have accepted the economic reality that the choice is between the deal on offer and an inevitable exit from the single currency, an possibly the EU itself.