Monday 18 June 2012

Greek election results

Results: ND 29.7% (+10.8%), SYRIZA 26.9% (+10.1%), PASOK 12.3%(-1%) 
Possible Coalition government:
ND+PASOK+Democratic Left (total 48%)= 179 seats out of 300. Majority of 29.
Oppostion: SYRIZA+Communists+Independent Greeks (total 39%)=103 seats
Golden Dawn 6.9%=18 seats

Immediate reaction would be risk on but this may be proved short lived. Europe would now have to respond. We could see an easing in the war of words but whether this translates into a change of policy is another matter.

The Greek battle resembles France in 1940. German forces led by Guderian are crossing France on their way to the channel while in Paris they change General Gamelin for General Weygand. In the process vital time was lost and together France.

Due to the nature of the electoral system that gives a bonus of 50 seats to the first party, ND would be able to form a coalition government together with PASOK and possibly the Democratic left (6.2%). This in theory would buy Greece some time before reality hits back. The truth is that the economic collapse is accelerating in Greece and stopping it would take more than just a coalition government.

If one sees these elections as a referendum for Euro and Europe the results were very close and ambiguous. Pro-European parties just managed to get the upper hand. But it really depends what pro-european means. It certainly does not mean pro-memorandum or pro-reform. All parliamentary parties campaigned on a renegotiation or total abolishment of the MOU with the troika. The Greeks are still in denial of the changes that need to be done in their way of life. Instinctively, they want to remain within Europe but make only cosmetic changes in their lifestyles.

The main failure of ND and PASOK was their two-faced approach towards economic reforms and Europe. They both supported the MOU (in parliament) while at the same time, they either bad-mouthed it or cynically admitted that the purpose was to trick Europe into giving them more money. That two-faced approach was cleverly exposed by SYRIZA who campaigned on the very clear position of a NO to changes.


Many of the Greeks voted for ND with a heavy heart and out of fear that SYRIZA would take Greece out Europe and Euro. For many it was a tactical and strategic voting and it does not represent a strong party choice. Nevertheless, it allows ND to form a coalition of pro-european forces. This would buy Greece some time. The main problem however is that the harsh measures of reforming the collapsed Greek economy are ahead. However, as explained earlier pro-european does not in any way mean pro-reform or pro-MOU. And this ND led government would have to pass and more importantly, implement structural changes in an economy that is in its last rites.


SYRIZA the anti-Memorandum party came second and one could sense the relief and joy of the SYRIZA executives. Being the leading opposition is the best place to be. It allows them to build and consolidate their numbers even more with the aim of total domination in the next elections. Unsurprisingly, they ruled out participating in any coalition government and they announced a dynamic opposition. The truth is that without SYRIZA’s at least tacit approval none of the reforms needed would be implemented in Greece. SYRIZA then would be able to come triumphantly and say “I told you so”.

The next 3 to 6 months are crucial. The danger of Greece leaving the Euro is far from over. Greece is running towards a winter of utter discontent.