Greek leftists Syriza aim for historic election win

Reuters News
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Posted: Jan 24, 2015 7:10 PM

By James Mackenzie

ATHENS (Reuters) - Greeks vote on Sunday in a historic election expected to bring in a government led by the leftwing Syriza party, which has promised to take on international lenders and roll back painful austerity measures imposed during years of economic crisis.

Barring a huge upset, victory for Syriza, which has led opinion polls for months, would produce the first euro zone government openly committed to cancelling the austerity terms of its EU and IMF-backed bailout program.

A Syriza win would represent another turning point for Europe after last week's announcement by the European Central Bank of a massive injection of cash into the bloc's flagging economy after years of trying to clamp down on budgets and pushing countries to pass structural reforms.

Polls are due to open at 7.00 a.m. (12 a.m. ET) and are due to close at 7.00 p.m. with the first exit poll expected immediately after voting ends.

While Syriza is expected to form the biggest group in the 300-seat parliament, it is unclear if it will be able to govern alone or have to form a coalition with one or more of the smaller parties.

Final polls on Friday gave the party led by 40-year-old Alexis Tsipras a lead of up to 6.7 points with 31.2 to 33.4 percent of the vote, close to the level needed for an outright victory.

Three out of four polls showed Syriza widening the gap over the center-right New Democracy party of Prime Minister Antonis Samaras.

After its most severe crisis since the fall of its military junta in 1974, Greece's economy has shrunk by some 25 percent, thousands of businesses have closed, wages and pensions have been slashed and unemployment among young people is over 50 percent.

At the same time, its massive public debt has climbed from 146 percent of gross domestic product in 2010 to 175.5 percent last year, the second highest in the world.

The Greek economy last year emerged from recession for the first time in six years and unemployment has begun to come down slightly, but it may be years before the country recovers.

Tsipras' campaign slogan "Hope is coming!" has resonated with austerity-weary voters, despite Samaras' warnings that a Syriza government could bankrupt Greece.

"We are voting for Alexis Tsipras to put an end to this misery," said Stavroula Gourdourou, an unemployed mother who will vote for Syriza for the first time. "Enough is enough! We won't let them destroy our children."

Renouncing much of the firebrand rhetoric that was once his hallmark, Tsipras has promised to keep Greece in the euro and dropped threats to "tear up" the tough requirements of its 240 billion-euro bailout.

He has promised to renegotiate a deal with the European Commission, ECB and International Monetary Fund "troika" and write off much of Greece's 320 billion-euro debt, despite clear signs from partners including Germany that they would refuse.

At the same time, he wants to raise the minimum wage, cut power prices for low income families, cut taxes and reverse pension and public sector pay cuts.

NEGOTIATIONS

Financial markets have been on edge ahead of the elections, although the ECB's massive bond-buying program and growing confidence that a Syriza-led government could compromise with its creditors boosted confidence last week.

Syriza would need around 40 percent of the vote to be guaranteed a majority but it could win with less depending on how well other parties perform.

If not, it may need to form a coalition with a small party such as the centrist To Potami, the center-left PASOK or the anti-bailout Independent Greeks or form a minority government, relying on ad hoc support from other parties.

With sky-high borrowing costs keeping Athens out of the markets, whichever government emerges will have to negotiate an extension to a Feb. 28 deadline, when Greece's program with the euro zone expires.

Although it would keep access to IMF funding, Greece still needs support from Europe, with almost 10 billion euros in debt repayments falling due over the summer.

Samaras made some progress with reforms demanded by the troika, reducing government red tape and selling state assets. Greece also had a primary budget surplus, net of interest payments, last year. But deep-seated economic problems remain, from inefficient industries and over-powerful lobbies to widespread corruption and tax evasion.

Syriza officials have said they would seek a six-month "truce" whereby the bailout program would be put on hold while talks with creditors begin. However, they face stiff resistance from the rest of Europe, raising the specter of Greece being forced out of the euro if no agreement is reached.

(Additional reporting by Renee Maltezou; Editing by Raissa Kasolowsky)