2019 Elections - Part 5. Greece: New Democracy Promises Magic Makeover

The incumbent, a battle-hardened Alexis Tsipras, vows to lead a revived and renewed government, unshackled by the Troika. Though promising electoral giveaways, in reality, Syriza has limited scope for populist adventures and the clock is ticking. In fact, under the capable tutelage of finance minister, Euclid Tsakalotos, as well as the urgings of the Troika, Greece has run a tight ship. They are unlikely to be rewarded for their efforts. The recent no-confidence vote, triggered by the Macedonia Prespa agreement, has had a bruising impact on Syriza, costing them some precious Nationalist/nativistic votes at home while boosting Tsipras’s credentials, in some external circles, as an international statesman. The deal enhances security in the Balkans, will accelerate planned projects for energy and transport networks, and will upgrade Greece’s geo-political status. Will Tsipras win a Nobel Prize and lose the election? The unlikely reelection of Syriza with support from a smaller party -as in 2015- would be seen at best as a market neutral event. If New Democracy were to “win”, and they are extending their lead in the polls, with or without support of a smaller party, markets will rally as Syriza is identified as a less-friendly market force and some of their more ideological policies have irritated swathes of the population. New Democracy may represent, according to some commentators, a much-needed change of scene, reviving a suppressed enterprise culture, raising “animal spirits”, and aggressively tackling the Banking Sector imbroglio and accelerating privatisation. We do not though believe, that either Syriza (signed-up to privatisation as well) or New Democracy would alter the economic landscape much. They may both need another party as in 2015 to reach a majority. A coalition government led by the left or right would have a limited impact, reducing ideological content of respective parties. Whoever is elected has to follow a fairly prescriptive agenda within a pro-EU framework given Greece’s modest scope for expansionary fiscal policy amidst creditor demands and requirements. Is Greece in fact Europe’s first post-populist narrative? That will be for New Democracy to prove.

This series is co-authored by Paul Hollingworth at Creative Portfolios and Virgil Fernandez Esguerra.