6 May 2012

Greek voters reject coalition’s austerity plans

Greece’s two main parties – PASOK and New Democracy – were expected to incur huge losses when polls closed Sunday night as their popularity plunges to lows not seen since the 1974.

No clear winners Greek voters had 32 parties to choose from and it was unclear on Sunday night which were leading among the 10 that could enter parliament. A range of smaller parties looked likely to benefit, however, from the Communists to the anti-immigrant, far-right Golden Dawn party which could enter parliament for the first time.

“I doubt if anyone has ever read an agenda of a smaller party,” said Spiros Rizopoulos, a political communications expert. “It’s because they want to protest a decision that has been made” that led Greece into the bailouts and the ensuing austerity.”

The election results – and a further round of austerity measures due in June – matter not just to Greece but to Europe. Any further political instability will raise questions over the viability of the euro and the eurozone itself.

Scrap the bailout deals

Billions of euros worth of international rescue loans from Europe and the International Monetary Fund have kept Greece afloat after five years of recession and with more than 21 per cent unemployment.

But parties such as Greece’s Left Coalition party have pledged to scrap Greece’s bailout deals, cancel most of the country’s crippling debt load and nationalise the banks.

Tensions have littered the road to Greece’s critical election for more than two years. In early 2010, the Greek budget deficit was four times the European Union- permitted level. Since then, it has lurched from crippling strikes to violent protests, via promised bailouts and dramatic government cutbacks.

Fear of physical violence

Anger over Greece’s economic crisis was so palpable politicians campaigned quietly for fear of physical attacks from hundreds of thousands who have lost their jobs.

“This whole situation has destroyed our dreams,” said Haris Manolis, a worker at a steel factory where employees have been on strike for six months.

The IMF says it it will hold meetings in Greece when a new government is formed.

“We all know the program has been agreed. The major political parties have given their commitment to the major objectives of that program. And so things haven’t changed in that respect,” Gerry Rice, IMF director external relations said last week.