Greece: Syriza to edge cliffhanger election

The outcome of Greece’s pre-term election is uncertain. We assume an opposition victory and the formation of a coalition government led by Syriza Unifying Social Front (Syriza), with centrist and centre-left parties. Such a government’s room for manoeuvre as regards Greece’s bail-out programme reforms and debt restructuring would be limited, making the administration highly unstable. A repeat election any time in the next few months would be a referendum on Greece’s euro zone membership. 

According to Greek electoral law, the party that receives the most votes gets a 50-seat bonus, which for Greece’s 300-seat parliament is quite significant. Based on current projections, this party looks to be the left-wing Syriza, whose platform consists of a tough negotiating line with the country’s creditors and a rolling-back of some of the reforms already undertaken under the Economic Adjustment Programme (EAP) for Greece that was tied to the country’s massive bail-out by its euro zone partners and the IMF.

Between anger and fear

In about a dozen polls released over the past week, Syriza is consistently in the lead, and its projected share of the vote is increasing. That lead is small (between 2% and 3%), however, and being rapidly eroded by the senior partner of the current centre-right coalition, New Democracy (ND), which is also increasing its projected share of the vote. With most polls in Greece operating with error margins of ±5%, the election looks set to be a cliffhanger.

The undecided share of the vote remains, two weeks before the election, a sizeable 10-15%. Although this segment is traditionally projected to vote like the rest of the survey, recent poll findings suggest that this may not be the case. Greece seems torn between anger and fear—anger at incumbent political elites who have got the country into this mess and then foisted austerity onto its people, and fear at the unknown consequences of electing an anti-bail-out party to power. Syriza is urging Greeks to punish the two mainstream parties it blames for the country’s dire predicament, while ND is scaremongering about the perils of electing a far-left party such as Syriza. Neither side is addressing the crucial issues facing Greece and being honest about how it will deal with them. It is difficult to say if one emotion is more potent than the other at this stage and which may win over more of the undecided.

Would Syriza be able to form a government?

Syriza strategists have told The Economist Intelligence Unit that they would expect to get an absolute majority (151 seats) with 33% of the vote, assuming that five parties enter parliament. The election is being contested by 25 parties, but only those that pass a nationwide 3% threshold enter parliament. At the moment, it looks likely that six parties will achieve this. Apart from the two main contenders, there will be the centre-left junior coalition partner, the Panhellenic Socialist Movement (Pasok), and a centrist populist party formed last year, To Potami (The River), both of which are likely partners in an attempt by Syriza to form a government. In addition, Greece’s hardline Stalinist Communist Party (KKE) and the far-right, neo-fascist Golden Dawn will also pass muster, although they are unlikely to be part of any new government.

Election projections
Party Share of the vote (%) Seat allocation
Syriza Unifying Social Front (Syriza) 29-31 135-140
New Democracy (ND) 28-30 80-105
To Potami (The River) 5.5-6 16-18
Panhellenic Socialist Movement (Pasok) 5-5.5 14-16
Communist Party (KKE) 5-5.5 14-16
Golden Dawn 5.5-6 16-18
Independent Greeks 2.5-3 0-9
Democratic Socialist Movement (To Kinima)a 2.5-3 0-9
Total 300
a New party formed by George Papandreou.
Source: The Economist Intelligence Unit.

It is also possible that the Democratic Socialist Movement (To Kinima), a Pasok splinter group led by the former prime minister and Pasok leader George Papandreou, and/or the Independent Greeks, a nationalist anti-bail-out splinter from ND, will pass the required threshold. The smaller parties get a seat allocation that is approximately proportional to their share of the vote, while the percentage received by the parties that do not get in forms largely the basis of the 50-seat bonus awarded to the front-runner.

It is unlikely that either of the two conditions set by Syriza’s strategists will be fulfilled. Thus, a best-case scenario for Syriza looks like a win yielding a 140-seat allocation. Despite its official “party” status, Syriza is not however a party in the normal sense, but a coalition of more than two dozen leftist factions ranging from Maoists and Trotskyites on the left to Eurocommunists (the party’s original roots), disaffected Pasok socialists and Greens on the right. Greece’s electoral law breaks the country into constituencies that are large and have many candidates from the same party contesting them. This means that even a centre-leaning Syriza parliamentary bloc is certain to contain no less than 20 devout anti-euro hardline left-wingers.

Who might its partners be?

Syriza’s most obvious potential partner is To Potami. This could be an attractive match; the new party, which pledges a pro-business, pro-Europe agenda, is reportedly backed by powerful mainstream Greek business and media interests, which might reassure foreign lenders and investors concerned about Syriza’s leftist economic orientation. Similarly good matches would be Pasok and To Kinima.

We do not think it likely, but if Syriza looked left to the communists the government would be highly unstable. The KKE would demand a Grexit, a cessation of all debt payments and a roll-back of all reforms. Syriza’s leader, Alexis Tsipras, has already opened the floor to the communists, extending a public invitation to the party to co-operate.

If ND wins, it is more likely to be able to form a government. The third party is also fairly important here as the incumbent president is required to ask each of the leaders of only the three largest parties in turn to try to form a governing coalition. Thus, if both main contenders fail to bring together a coalition, the third party, which could be To Potami, could be decisive in its preferred choice of partner(s).