Europe Braces for Crunch Greek Election
Not only Greece but also Europe braced Saturday for an election that polls indicate will decimate the two main parties and fail to produce a clear winner, sparking market fears about fresh Eurozone turmoil.
In comments widely quoted by Greek newspapers on the eve of Sunday's vote, German Finance Minister Wolfgang Schaeuble said that if Greece's new government deviated from its commitments the country would have to "bear the consequences."
"Membership of the European Union is voluntary," the minister from the Eurozone’s chief contributor to Greece's 240 billion euros ($314.0 billion) in bailouts and the main proponent of European belt-tightening was quoted as saying.
Greece has written off a third of its debts, is in its fifth year running of recession, one in five workers is unemployed, its banks are in a precarious position and pensions and salaries have been slashed by up to 40 percent.
With Portugal and Ireland also getting aid and Italy and Spain on shaky ground as well, last year there were worries of some sort of break-up of the Eurozone. These fears have subsided in recent months but have not completely disappeared.
For markets, it is Greece's vote rather than France's presidential decider, also on Sunday, that "weighs heavier" in investors' minds, said Valerie Plagnol, director of research at the Credit Suisse bank.
Holger Schmieding, economist at Germany's Berenberg Bank, said there was a 40-percent risk of Greece leaving the Eurozone this year, with a "high" chance that no stable government willing to implement more reforms can be formed.
Europe's press shared these worries, with Germany's Spiegel saying Greek politicians were behaving like "alchemists", while Belgium's Le Soir said it was "vital" for the Eurozone that a new government is formed soon.
Germany's center-right Frankfurter Allgemeine Zeitung daily said that efforts throughout "southern Europe" to cut spending and implement reforms must continue, otherwise "the crisis could escalate badly."
Election campaigning has been marked by voter anger with Greece's two main parties over the cuts that the country has been forced to promise in return for its bailouts. In June new savings of 11.5 billion euros have to be found.
"People are spending half what they used to," Panos Ioannidis, 41, the owner of a flower shop in an up-market area of Athens, told Agence France Presse. "If in June wages go down another 30 percent, we are expecting the worst."
The two main parties, the socialist Pasok and the conservative New Democracy, want to be cut slacker on the terms of the bailout, and many of the smaller parties want to tear up the agreement entirely.
"We need to break from this corrupt political system of lackeys of foreign imperialism," Petros Alachmar, 31, an activist from far-left Syriza party, one of several expected to steal votes from Pasok, told AFP late Friday.
"We have had enough of austerity measures."
Voters are also fed up corruption and cronyism, while immigration has also been an issue. The neo-Nazi Golden Dawn, completed with swastika-like emblem, may enter parliament for the first time in nearly 40 years, polls show.
The election is being fought over "a mixture of economy, immigration and national humiliation," said analyst George Sefertzis.
New Democracy is expected to win the most votes but not enough to govern alone, forcing leader Antonis Samaras into a coalition with smaller parties. If no coalition is formed, new elections could be called.
"Our place in Europe and the euro will be decided on Sunday," Pasok leader Evangelos Venizelos, 55, told a rally in Athens' central Syntagma Square, the focal point of sometimes violent protests in recent years, late Friday.
Source: Agence France Presse
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