On 31st August last Greek Prime Minister Kostas Karamanlis (Nea Demokratia, ND) told the President of the Republic, Kostas Papoulias of his decision to dissolve Parliament and convene early general elections (2 years earlier than initially planned in autumn 2011). The head of government announced on 3rd September that the election would take place on 4th October next.

"I quite consciously took this decision following the interests of the nation. We must clear the political landscape and establish a series of vital measures to emerge from the economic crisis. Before us we have two extremely difficult years," stressed Kostas Karamanlis in a televised address. "The weight of the economic crisis and the perspectives of the next two years force me to undertake drastic reforms and to do this I need the confidence of the people. 2010 will be a difficult, decisive year and the Greek population has to choose the government that will be able to bring the country out of the crisis," he added indicating that he would be running for another term in office.

The Prime Minister indicated that the early election had been forced upon him because he had been "blackmailed" by the main opposition party, the Pan Hellenic Socialist Movement (PASOK). This party has been demanding an early election for months and has said that it would use the end of the present mandate of President Papoulias, in March 2010, to achieve the organisation of early general elections by standing against the election of a compromise President - contrary to its action during the last presidential election in February 2008. According to the Greek Constitution the President of the Republic has to win the votes of 200 of the 300 MPs in Parliament otherwise new general elections have to be convened. Since it only enjoys a narrow majority in Parliament Nea Demokratia cannot be certain that its candidate will be elected which has forced the Prime Minister to take action. "My aim initially was to undertake vital structural reforms (controlling public spending, fighting tax evasion etc ...) by 2011 but this would require a favourable political climate," said Mr Karamanlis adding, "with the opposition's blackmail the country would have been subject to an electoral campaign for six months and this would have been catastrophic for the economy since stability and a serene climate are necessary in order to implement vital policies." This diagnosis is shared by Greek businessmen who say that the country needs a "strong, determined" government to face the threat of recession.

Kostas Karamanlis is used to early elections. Appointed as head of government in March 2004 he was re-elected on 16th September 2007 after an election which had shortened his mandate by one year. Except for a parenthesis between 1989 and 1990 the present electoral rush is unusual since Greece's return to democracy in 1974. The weak majority enjoyed by the government could have prevented it from rising to future challenges but this is not the only reason why the Prime Minister took this decision – which came as a surprise to the Greeks. In these early elections Kostas Karamanlis has certainly detected the means of preventing more internal tension from further weakening his majority after the summer recess; he may also have wanted to a keep a few steps ahead in the revelation of certain new scandals (three ministers, involved in various affairs, have been forced to resign). Some political analysts also perceive in the head of government's surprise decision a manœuvre that will leave the most difficult stages of the economic crisis in the hands of the leftwing opposition so that he can take power again once growth has returned.

Kostas Karamanlis' 'double or quit'

Nea Demokratia's leader (ND), which is lagging behind in the polls has taken a major risk in shortening its term in office by two years. "He was extremely convincing with regard to the need for another election but not at all so with regard to the reasons why he should be re-elected," stresses political analyst Pavlos Tzimas. In an attempt to win these early elections the Prime Minister will play the card of economic reform. He has made the reduction of public spending; the fight against tax fraud and the implementation of structural reforms his three priorities for the election on 4th October.

In the second quarter Greece just avoided recession recording a rise in its GDP of 0.2%. The government is planning growth of 1.1% over this year whilst the European Commission is forecasting a decline of 0.9%. But Greece, which has a public deficit of over 5% (5.7% forecast in 2010) and an estimated GDP debt of 96.3% (around 60 billion €) in 2009, is being urged by the EU and the IMF not to delay in adopting structural reforms.

Economy Minister Yannis Papathanassiou tried to secure a new deadline from Brussels for the country's return to a certain amount of budgetary discipline; it is the weak link in the euro area. Greece, which has been relatively protected to date started to feel the effects of the international economic crisis as tourism declined – this is one of its main resources - and as consumption and real estate transactions stagnated.

In addition to this, social unrest, which degenerated into urban violence in December 2008, and led to the death of a 15 year old boy, Alexis Grigoroupoulos, seriously affected confidence in the government (one of the most unpopular since the end of the dictatorship in 1974). Attacks regularly disrupt Athens and Thessaloniki. Just before the announcement of the early elections two bombs exploded in these two towns. Recently the Greeks expressed their anger about the poor coordination of fire fighting work which, two years after the terrible fires of the summer 2007 (which led to the deaths of 77 people ), devastated the forests in the suburbs of Athens.

Finally ND suffered losses in the European elections on 7th June when they came second with 32.29% behind the PASOK (35.65%). The People's Orthodox Alarm (LAOS) won 7.15% of the vote (+2.88 points in comparison with the election in June 2004).

"These general elections are extremely risky from a political point of view for Kostas Karamanlis whose popularity is at its lowest ebb just two years after his re-election to power in September 2007," analyses economist George Pagoulatos. Many ND ministers and MPs did not conceal their anger on the announcement of early general elections. Some qualified the head of government's decision as "political suicide." Former Culture Minister, Michalis Liapis (ND) announced that he would not be running in the next election saying that this was "an historical error on the part of our party". "It is certain that the timing is not good," indicates Theodoros Livanios, political analyst from the institute, Opinion. He concludes, "Kostas Karamanlis did not have any choice." "After the various politico-financial scandals, the riots in December and the collapse of public finance the government's results are damning," stresses political analyst Dyonisis Nassopoulos adding "now it is opening the door to political change and instability."

The Prime Minister's Wager should benefit the Socialists

"The government has collapsed under the weight of its failures, it has collapsed as it reached stalemate," declared opposition leader, former Foreign Minister (1999-2004), George Papandreou, calling on the Greeks for "a new start". On the anniversary of the founding of PASOK he pointed to the failure of the ruling power. "If the country is now is such an economic situation it is because of bad decisions taken over the last seven years," stresses Maria Karahlioumi, one of PASOK's spokespeople, adding, "an increase in unemployment, the breakdown of the education system, rising illegal immigration, the lack of control over tax fraud ... George Papandreou is ready to take power but he needs a clear victory. To achieve that, we have a real plan for the country to emerge from the crisis which is notably based on a green growth model." Visibly the PASOK did not miss the (slight) breakthrough made by the ecologists in the European elections on 7th June last. The Greens won 3.49% of the vote i.e. +2.89 points in comparison with the election in June 2004.

For the last few months the PASOK has intimated that a priori it would not refuse the formation of a government coalition with the radical left (SYRIZA) saying that has even asked a party committee to look into the means of drawing closer to the far left movement. An alliance such as this might however prove dangerous for the PASOK. Indeed Alexis Tsipras, former leader of Synaspismos, which gave rise to the Radical Left Coalition, has never concealed his support of the riots in Athens at the end of 2008. In addition to this the far left party struck a chord with some of its supporters when eurosceptic Nikos Choundis was chosen to lead the Radical Left Coalition in the European elections in June last. This radicalism may scare off some of PASOK's centrist electorate.

Although the PASOK seems to have caught up with the ND since it was ejected from power in 2004 it still struggles to raise enthusiasm and has not been spared its share of politico-financial scandals. Even if it wins the general elections the PASOK may find it difficult to win enough votes to enable it to form a government alone. Its leader George Papandreou says that if the election did not provide him with the absolute majority he would demand the organisation of new elections. "The PASOK has the upper hand, but it remains to be seen whether it can form a government or not," says the political analyst from Opinion, Theodoros Livianos. "Three scenario are possible: the organization of new elections, a government coalition with the PASOK and a small far left party or finally a grand coalition rallying the country's two main parties, ND and PASOK," he added before concluding "considering Greece's political history another general election seems the most likely option."

The Greek Political System

The Vouli (Parliament) is unicameral and comprises three hundred members, elected by proportional representation for 4 years in 56 constituencies. 51 of these appoint 288 MPs, the remaining 12, called national representatives since they represent all of Greece – an honorary position – are elected using the results of each of the political parties nationally. The electoral system of enhanced proportionality guarantees a 70% level of representation for the political parties who have the right to sit in Parliament. Any political party winning at least 41% of the vote is guaranteed to hold the majority in Parliament.

5 political parties sit in Parliament at present:

- Nea Demokratia (ND), a centre-right party founded in October 1974 by former President of the Republic (1980-1995) and Prime Minister (1955-1963 and 1974-1980), Konstantin Karamanlis, uncle of outgoing Prime Minister, Kostas Karamanlis; 152 seats;

- The Pan Hellenic Socialist Party (PASOK), the main opposition party founded in September 1971 by Andreas Papandreou. Nationalist and populist under the chairmanship of its founder it became a European Social Democratic movement with former Prime Minister (1996-2004) Costas Simitis. Led since 2004 by former Foreign Minister (1999-2004) George Papandreou, the founder's son; the party has 102 seats;

- the Communist Party (KKE), a party founded in 1918 born of the Socialist and Workers' Movement, is anti-European and led by Aleka Papariga; it has 22 seats;

- the Radical Left Coalition (SYRIZA), a far left party founded in 2004 on the base of the former Synaspismos; it rallies several leftwing organisations, including the former leftwing of PASOK, some Communist and Ecologist sympathizers; it is led by Alecos Alavanos and has 14 seats;

- The People's Orthodox Alarm (LAOS) a far right party founded in 2000 by journalist Georgis Karatzaferis, former ND member has 10 seats.

According to the polls published on 3rd September last the PASOK is due to win 31.5% of the Greek vote, 25.1% would go to ND. 21.6% of those interviewed say they are undecided. "The Socialists might not win enough votes to form a government alone but they will be the major winners in these general elections," says political journalist George Kyrtsos. Although many forecast the collapse of ND a close victory clinched by the party cannot be totally ruled out however.

In a climate of political polarization, abstention and the rise of extreme movements comprise major dangers. Most political analysts are counting on victory for the opposition but doubt that they will achieve an absolute majority. The country is in danger of experiencing a period of political instability. The formation of a minority government or a major German-type coalition would comprise an all time first in Greek political history.

Source : Greek Interior, Civil Service and Decentralisation Ministry