The Shock of May 6th

The general elections of May 6th in Greece caused a political earthquake in a country suffering an extremely serious financial and socio-economic crisis. People voted en masse against austerity and the European Memorandum, the agreement signed in February by Athens with the International Monetary Fund (IMF), the Union and the European Central Bank. Both of the main government parties – the Panhellenic Socialist Movement (PASOK) and New Democracy (ND) collapsed, whilst together they won 77.40% of the vote in the previous elections of October 4th 2009, they only won 32.03% of the vote on May 6th last. ND won 18.85% of the vote (108 seats, +17) in comparison with the last general elections on October 4th 2009 and PASOK were totally wiped out with 13.18% of the vote (41 seats, -119).

The real winner of the election was the Radical Left Coalition (SYRIZA) which under the banner "They chose without us. Let's move on without them," campaigned on the rejection of the Memorandum and the maintenance of Greece in the euro zone. It won 16.78% of the vote (52 seats, + 39). The Independent Greeks' Party (AE), created on February 24th last by former Maritime and Islands Minister and former ND member, Panos Kammenos, came fourth, winning 10.60% (33 seats). It pulled ahead of the Communist Party (KKE) led by Aleka Papariga, which won 8.48% (26 seats, +5) and the Democratic Left (DIMAR), founded in June 2010 and led by Fotis-Fanourios Kouvelis, which won 6.11% (19 seats).

The other event in this election was the result achieved by the neo-Nazi party, Chryssi Avghi (CA, Golden Dawn) led by Nikolaos Michaloliakos, which won nearly 6.97 (21 seats).

The general election of May 6th therefore brought bipolarisation in Greece to end – this has been in force since the country returned to democracy in 1974. The left/right split has given way to that opposing those in favour of the Memorandum and those who want a radical revision of the agreements signed with the IMF and the EU. "The general elections of May 6th were mainly used to express anger. Society needed it," stresses Thanaos Dokos, director of the Hellenic Foundation for Foreign and European Policy (Eliamep).

Antonis Samaras, (ND), as the leader of the party that in fact came first in the election, was the first to try and put a government together suggesting the establishment of a "national salvation" coalition. After failing to do this the leader of the party that came second, Alexis Tsipras (SYRISA) tried to form a coalition. This was to no avail since the KKE refused to join it. PASOK leader, Evangelos Venizelos, finally tried to bring a team together to govern the country, but he failed too.

The President of the Greek Republic, Carolos Papoulias, then convened Antonis Samaras, Evangelos Venizelos and Fotis-Fanourios Kouvelis, only the leaders of parties that support the Memorandum in a final bid to form a government of national union. "The differences in your positions are small and insignificant in view of what you owe the country," said Carolos Papoulias who indicated he was, "alarmed at the risk of the political instability that weighs over Greece." The president of the European Council, Herman van Rompuy, appealed to the Greek leaders, whom he asked to respect the commitments undertaken by Athens: "I am very concerned about the situation in Greece. I am calling on the national sense of responsibility of all of the political leaders so that they come to an agreement that respects the country's commitments and guarantees its European future."

Alexis Tsipras refused to take part in the last chance negotiations that took place on May 14th; the KKE and Golden Dawn were not invited to take part. "It is not the Left Coalition that is relinquishing participation in a government coalition with the right and PASOK, it is the verdict of the Greek people. Finally we have three parties that have aligned themselves on the application of austerity and we are not going to be used as an alibi," indicated Alexis Tsipras.

The Democratic Left refused to enter a government in which SYRIZA was not taking part. "A government that cannot guarantee participation by the country's second party will not enjoy the vital support of the people and the parliament. Because SYRIZA was rejected, this government could not be put together," stressed Fotis-Fanourios Kouvelis. "They have shown immense irresponsibility," stressed political analyst Elias Nikolakopoulos. "The political system's autism is taking it towards a disastrous choice," indicated his colleague Georges Séfertzis.

Finding it impossible to achieve a majority government after the vote on May 6th the Greeks were invited to vote again on May 16th. The next election has been set for June 17th. On May 17th a provisional government comprising 16 ministers (high ranking civil servants and academics) was appointed. It is led by the President of the State Council, Panayotis Pikramenos.

Can another election bring the country out of the crisis?

"The general elections on May 6th last comprised a vote of anger and punishment. The electorate voted against the two main parties thinking that they would enjoy a majority together. They can return to the "useful vote". This time European messages about a possible exit from the euro zone have been understood, but over intervention by Europe during the electoral campaign may have a negative effect," analyses Georges Séfertzis.

SYRIZA lies ahead in terms of voting intentions. It is the party with most interest in a further round of voting. Encouraged by becoming the country's leading party, Alexis Tsipras is refusing any kind of concession. He will now have to convince the electorate that Greece can reject the Memorandum and yet remain in the euro zone, a difficult task for a party that is more at ease in opposition rather than in proposition. During the electoral campaign it might also become the favourite target of the other parties who will demand that it provides details of its government programme and about its position vis-à-vis the European Union. The PASOK and ND absolutely have to succeed in motivating the abstentionists, which will not be easy in a country where most of the electorate are registered in the town where they come from, which means that many of them will have make another long trip. They also have to attract the 19% of the electorate who voted for the parties that won less than 3% of the vote necessary to be represented in the Vouli, the only chamber in Parliament.

Both parties will try to convince the Greeks that they can achieve greater flexibility in the austerity measures included in the Memorandum. The ND will try to address those who vote for the Democratic Alliance (DS), founded by former Foreign Minister (2006-2009) and former Mayor of Athens (2003-2006), Dora Bakoyannis, and Drasi, a centrist party led by Stephanos Manos. PASOK fears further collapse during the upcoming election. It is demanding the extension of the deadline for the country's return to budgetary balance (2015 rather than 2014).

Will Greece leave the euro zone?

Greece is on the edge of the abyss: the privatisation programme was due to bring in 20 million € by 2015 and fill the country's coffers, but it has now been frozen; the recession has worsened (GDP decline of 6.5% in the first quarter of 2012) and the recapitalisation of banks still has not been completed. The ECB has incidentally announced that it was stopping its monetary policy operations with several Greek banks that have not "been recapitalised correctly". Athens now runs the risk of not having enough money to pay public sector salaries and retirement pensions. Moreover the country has to put forward further austerity measures representing 5.5% of the GDP by the end of June. The Greeks, who evidently lack confidence in the future, have withdrawn a great amount of money from the banks (around 700 million € on May 14th). According to data put together by Thomson Reuters the country's banks have lost 72 billion € in savings since 2010, i.e. around 30% of the total of the sum at that time.

The prospect of having to vote again has revived concern over the future of the euro zone and the risk of seeing Athens give up the single currency increases daily. The President of the French Republic, François Hollande (Socialist Party PS), and German Chancellor Angela Merkel, (Christian Democratic Union, CDU), said on May 15th that they wanted "Greece to stay in the euro zone". They said they were prepared to look into the adoption of growth measures. Wolfgang Schäuble (CDU) did however recall that it was "dangerous to promise the electorate that there would be another, simpler way to cure Greece and that all of the tests might be avoided. It is absurd. The aid plan to Greece was defined down to the finest detail, it cannot be renegotiated."

European Commission President José Manuel Barroso said that the commitments undertaken by Athens had to upheld by the country's future leaders. "We have to tell the Greek population that the EU and IMF's programme for Greece is the least difficult alternative. There are none which are less difficult. We want to help Greece and we want to work together with Greece. Now it is up to the Greek population to say whether it wants to work with the euro zone Member States and the European institutions," he maintained.

Some European leaders and IMF General Manager Christine Lagarde no longer hesitate in speaking of Greece's exit from the euro. The latter said that her organisation had made a technical assessment of a possible orderly exit of Greece from the euro zone and warned that it would be "extremely expensive". "In the IMF we should be technically prepared for everything but I do not mean that this is a desirable solution. I am simply saying that it is one of many options that we have to look at from a technical point of view," indicated Christine Lagarde. Fitch took down Greece's long term rating on May 17th to "CCC" against a previous "B-" quoting an "increased risk" of the country quitting the euro zone.

The Radical Left (SYRIZA) is leading in voting intentions in the poll undertaken by Pulse RC, published on May 17th and are credited with 22% of the vote ahead of ND (19.5% of the vote) and PASOK (14%). The Independent Greeks' Party is due to win 7.5%, the KKE, the Democratic Left and Golden Dawn 5.5% each. The Marc Institute put ND ahead in its poll published on May 17th last. Antonis Samaras's party is due to win 23.1% of the vote whilst SYRIZA is due to win 21%. PASOK is due to win 13.2%, the Independent Greeks, 7.2% ; the Democratic Left 5.6%, the KKE, 5.1% and Golden Dawn 4.3% - results which will not enable Greece to solve the political crisis.

"The political landscape cannot be reformed in a month. It is difficult to change people's vote in such a small period of time," stresses political analyst Elias Nikolakopoulos. The elections on June 17th next are no more than a referendum on the future of the country in the euro zone. If, as shown in the polls, most Greeks want to keep the single currency they have no other choice but to continue with austerity and structural reform as defined in the Memorandum, which at best they can hope to make slightly more flexible.