Athens In the Villa Maximos, the official residence of the Greek head of government on Herodes Attikus Street in Athens, Kyriakos Mitsotakis is rarely found these days. The Prime Minister is constantly on tour, between Macedonia in the north and Crete in the south. Mitsotakis holds several rallies every day.
On May 21, Greeks will elect a new parliament. Mitsotakis has governed with his conservative Nea Dimokratia (ND) for four years. Next Sunday, the 55-year-old is looking for a mandate for a second term.
In the most recent polls, the ND is six to seven percentage points ahead of the largest opposition party Syriza, the “Alliance of the Radical Left”. But it is unlikely that Mitsotakis will achieve his election goal – an absolute majority in the next parliament – on Sunday.
His opponent is an old acquaintance: Alexis Tsipras. The 48-year-old Syriza boss was prime minister from 2015 to 2019, until Mitsotakis replaced him in the election four years ago. Now Tsipras is hoping for a return to Villa Maximos.
A change of power would have massive consequences for the Greek economy. Tsipras is planning multi-billion dollar social programs and has announced extensive nationalizations in the energy and banking sectors.
That’s what Mitsotakis promises
Mitsotakis promises “less taxes, new jobs and better incomes”. The ND estimates the costs of its election program at 8.9 billion euros by 2027. The minimum wage, which the government raised from 650 to 780 euros in its first term of office, is to rise to 950 euros in the next four years.
At his rallies, the Prime Minister warns the audience that the election will decide “whether Greece continues on the path of progress, recovery, stability and national self-confidence, or whether we return to the era of misery, of high taxes a Greece that counted for nothing in Europe and the world”.
This is an allusion to Tsipras, who led the country to the abyss of state bankruptcy in 2015 with his confrontational course with international creditors. Today Greece is in a very different position.
In terms of economic growth, it has been in the top group of EU countries over the past two years. According to the statistics agency Elstat, the unemployment rate is at its lowest level in 13 years. Inflation in April was three percent, well below the euro zone average of seven percent. Instead of an expected deficit in the budget’s primary balance sheet, which excludes debt servicing, the Athens Finance Minister generated a surplus last year, according to the Treasury Department.
No other EU country has reduced its debt ratio so drastically in the past three years, by 35 percentage points. According to Elstat, foreign direct investments increased in 2022 compared to the previous year from 5.3 to 7.2 billion euros.
Greece is also making rapid progress in digitization: According to the Ministry for Digital Administration, the number of electronic transactions between citizens and authorities grew from nine million in 2018 to 1.2 billion last year.
The track record is overshadowed
But the track record is overshadowed. A wiretapping affair brought Mitsotakis into an explanation last year. The Greek secret service eavesdropped on dozens of entrepreneurs, journalists and politicians, including Nikos Androulakis, leader of the third largest parliamentary party, Pasok. Mitsotakis protested that he knew nothing about it – although he reported directly to the secret service immediately after his election in 2019.
At the beginning of February, a serious train accident with 57 dead revealed grievances at the state railway network operator OSE. The transport minister resigned. Mitsotakis speaks of “mistakes from which we must learn”.
On Sunday, the prime minister wants to defend the absolute majority with which he has ruled for the past four years. But his ND is far from that with poll ratings of around 35 percent. For the first time, elections will be based on pure proportional representation, which the Tsipras government introduced in 2016.
>> Read here: How card payments could help Greece reduce debt
According to this, a party needs at least 48 percent of the votes for the absolute majority of seats. The Mitsotakis government changed the electoral law again in 2020. According to the constitution, the total number of mandates is set at 300. According to the reform, up to 50 of these can go to the strongest party as a bonus, depending on their share of the vote.
But according to the Greek constitution, changes to the electoral law only apply to the next but one election. Mitsotakis is therefore counting on a second ballot, which could give him an absolute majority. The new election could take place in early July.
Expensive campaign promises
Unless Tsipras succeeds in forming a minority government with the social democratic Pasok after the election on Sunday, with the toleration of left-wing splinter parties. The Syriza boss is already courting support for the MeRA25 party of his former finance minister, Yanis Varoufakis, and the Stalinist communists. Tsipras began his political career with them in the 1990s.
A return of the radical left to power would be a deep turning point for the country, especially in economic and financial policy. Tsipras wants to nationalize one of the four systemic banks.
Syriza also wants to bring the country’s largest electricity supplier DEI, the waterworks and the energy company Helleniq Energy under state control. It is unclear whether the private shareholders should be compensated or expropriated.
Tsipras promises voters subsidized energy tariffs, lower VAT on food, equal inflation for government employees, higher pensions and generous tax breaks. To finance this, Tsipras wants to tax corporate profits and the wealthy more heavily.
>> Read here: Greece is massively expanding its LNG infrastructure – but experts warn against overdoing it
According to Syriza’s own calculations, the implementation of these election promises will cost 22 billion euros over the next four years. The government puts the actual costs at over 80 billion euros. That would correspond to 38 percent of last year’s GDP. Mitsotakis now warned in a TV interview: “If Tsipras implements even half of what he promises, Greece will be insolvent in a month.”
More: Prime Minister Mitsotakis must fear for his majority