From the election polls to government debt – here’s a look at the figures behind the Greek election
Alberto Nardelli and Jennifer Rankin, The Guardian
Following the Greek parliament’s failure to select a new president at the end of last year, early elections were called for 25 January. Having topped last year’s European parliament elections, the radical left and anti-austerity party Syriza is ahead in the polls. Syriza wants to renegotiate the terms of Greece’s bailout deal. Many analysts believe the election, which outgoing prime minister Antonis Samaras of the centre-right party New Democracy (ND) has described as a referendum on Europe, could drag the eurozone back into a crisis.
Based on these polling figures there are several interesting factors to track.
While Syriza is likely to emerge as the largest party, it is unclear if party leader, Alexis Tsipras, will have the numbers needed to form a government.
If Tsipras does become PM, at 40 he would be the country’s youngest ever PM – well below the average age (64 years old) of PMs since 1974. He would also become the sixth Greek prime minister since German chancellor Angela Merkel took office in 2005 – that’s more leadership changes than any other euro zone member country.
Greece’s parliament is comprised of 300 seats, 250 seats are assigned via proportional representation, and the other 50 awarded to the party that wins a relative majority. There is a threshold of 3% required for entry into parliament.
Currently both centre-left parties, PASOK and Kinima (a new party launched this year by former PM George Papandreou) are polling perilously close to the threshold. Despite never being home to Europe’s most stable of governments, the PASOK figure is all the more extraordinary considering that in elections since the 1980s, the centre-left party and centre-right ND have consistently won a combined 80-85% of the vote.
This two-party dominance of course changed following Greece’s economic collapse and subsequent bailout.
In the two elections held in 2012, ND and PASOK won a combined 32% and 42% of the vote. The two elections also set the stage for Syriza’s rise. The party went from previous levels of single-digit support to 17% in May 2012, to 27% a few months later.
In 2012, the far-right Golden Dawn, which had virtually no support in all previous elections since the party launched in the 1990s, won 7% of the vote. The party is now polling just below those levels.
The communist KKE party is on 5.5%, in-line with its historic levels of support. The pro-Europe party To Potami, founded by TV presenter Stavros Theodorakis in 2014, is expected to win about 7% of the vote. The party elected two MEPs to the European Parliament in last year’s EU elections. While the right-wing anti-austerity party Independent Greeks (ANEL) are likely to see their support halved and may struggle to win representation in the new parliament.
But the election will be as much about political arithmetic as it will be about economics.
Greece’s GDP comprises less than 2% of the eurozone’s economy, but it is the fear of contagion and the precedent that an exit from the currency would set that worries governments and investors. According to most analysts though, a Grexit remains relatively unlikely, and the risk of contagion to other countries is today lower than it was in 2012.
Nevertheless this hasn’t stopped the speculation and rumours. The German governmenthas denied reports that it is relaxed about Greece leaving the euro. But one group that definitely doesn’t want a Grexit are the Greek people. A clear majority think the euro is “a good thing for Greece” despite years of hardship following a painful austerity programme to keep Greece inside the currency union.
Greek support for the euro – which peaked during negotiations over the country’s second bailout in 2011-12 – has been consistently higher since the onset of the debt crisis. During the years of plenty, after Greece joined the euro, barely 50% of the population supported a currency union.
When Greece joined the euro in 2001 – a late entrant admitted under fudged statistics – it was one of the two poorest members of the eurozone, along with Portugal. Greek’s membership of a larger union of states gave European lenders a false sense of security about its economy. Money flooded in, as banks decided that lending to Greece was as safe as lending to Germany.
Successive Greek governments went on a spending spree the country couldn’t afford, including the 2004 Olympics, which officially cost €6bn, although the final bill was allegedly more than four times higher. The Greek minimum wage rose by more than 50% in the decade after Greece joined the euro, against a relatively more stagnant EU average.
In 2001, Greek unemployment was close to 11%, the highest in the eurozone. At the peak of the financial crisis a quarter of Greeks were unemployed. The youth unemployment rate nearly hit 60%.
But many of Greece’s deeper problems went unreformed.
Corruption, also among the worst in the EU, went unchecked. Widespread tax evasion meant collection rates of income and wealth taxes were well below the EU average. In 2009, self-employed people hid €28bn (£21.7bn) income from tax authorities, according to a study published by Chicago Booth business school that compared bank records to tax receipts.
It was not only the middle classes. Around 2,000 wealthy Greeks had €1.5bn squirreled away in Greek bank accounts, according to data uncovered by the French authorities – aka the Lagarde list.
But Greece eventually paid a terrible price for its artificially-inflated boom. The country has endured six years of recession. Unemployment has soared; almost half of all young people are unable to find work. Around 3.9m people, more than one third of the population live below the poverty line, according to official data from Eurostat. In a recent survey, 47% said their family income was inadequate to meet their needs; while 55% said they had borrowed from family or friends, sold or pawned assets, or taken out loans to keep themselves afloat.
Meanwhile, TV licenses are still handed out for free (£), and according to SIPRI data, Greece has the second highest military spending as a percentage of GDP among NATO members – but after having enjoyed seven decades of tax-free status enshrined in the constitution, taxation on the country’s shipping magnates was introduced last year,
The most mobile Greeks have emigrated. In 2012 the country suffered the fifth largest population drop in Europe – only Ireland, Latvia, Estonia and Lithuania saw a bigger fall. Last year net migration reached 52,000. For those who stay, public services are buckling under cuts. Around 6.5% of the population have said they are unable to get the medical attention they need. The Greek healthcare system is mostly free at the point of use, so the numbers probably reflect deep cuts in healthcare budgets that have led to chronic staff shortages, the closure of some services, and hospitals without basic supplies, such as surgical gloves.
Against this backdrop, it is little surprise that the favourite to win Greece’s snap election, Alexis Tsipras, has pledged to “cancel austerity”.
His promise that Greece will leave its current bailout programme without further cuts puts him on a collision course with the European Commission, the International Monetary Fund and European Central Bank that have underwritten Greece’s €240bn bailout plan, in exchange for swingeing cuts and economic reforms.
Germany’s finance minister, Wolfgang Schäuble, has insisted “there is no alternative” to the current programme. Finland’s prime minister, Alexander Stubb, said he would give “a resounding no” to any attempt to write-off Greece’s debt.
Some eurozone politicians have hinted that Greece could get more time to repay its debts. But even the current plan envisages Greece will be weighed down by debt for the next decade: the IMF sees Greek debt falling to 117% of GDP in 2022, down from 175% today.
If the polls are accurate and Syriza does lead the first anti-austerity government since the crisis, the stage is set for what may become the biggest confrontation yet over the future of the eurozone – at least since the great Greek bailout of 2010.
