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Greece’s election on Sunday would be a good one to lose

Greek Nation Failed To Make Tangible Headway In Its Efforts To Secure Funding And Avoid A DefaultGreek Nation Failed To Make Tangible Headway In Its Efforts To Secure Funding And Avoid A Default
Who'll take charge of the ruins after Sunday?Photograph by Bloomberg via Getty Images

 

Here are three signs that Greece’s elections on Sunday are, to all intents and purposes, a non-event:

  1. The yield on Greece’s 10-year bond is trading at the lowest rate seen so far this year;
  2. No other European leader seems remotely concerned about the outcome;
  3. With less than 72 hours to go, nearly 20% of the electorate either don’t know who they’ll vote for, or will vote for parties they know have no chance of getting into parliament.

It’s a far cry from January, when the young, charismatic and inexperienced Alexis Tsipras led his Syriza party to victory on a promise of overthrowing the German-led diktat of austerity while keeping the euro. There was the promise of real choice, real politics, a real alternative (not a million miles away from the thinking that drove Jeremy Corbyn to the leadership of Britain’s Labour Party last weekend).

A brutal weekend of negotiations in July exploded that illusion, as the country’s creditors told Tsipras that if he wanted to end austerity, he could do it on Greece’s own dime, or rather, drachma. That weekend effectively determined the course of Greek politics for the next couple of years. What is happening this weekend is a little tidying of the domestic parliament to make it reflect that reality.

Tsipras’ party split after he accepted a new bailout deal for the country. He lost about a third of Syriza’s lawmakers, and around the same proportion of the party’s vote, if the polls can be believed (and that is a big if, on recent showings). The latest poll by Alco put Syriza at 23.3%, only fractionally ahead of the center-right New Democracy party on 23%.

Financial markets are pricing in a non-event: the yield on 10-year bonds hasn't been this low all year.
Financial markets are pricing in a non-event: the yield on 10-year bonds hasn’t been this low all year.

 

In January, Syriza had polled 36.3%, New Democracy 27.8%. But since neither can convincingly promise meaningful change, both are being hit hard by voter apathy. Syriza has lost most momentum recently, due partly to allegations of corruption aimed at Tsipras’ political mentor, Alekos Flambouraris. That affair could whittle away what remains of Tsipras’ lead.

The beneficiaries are a motley bunch of protest parties: the misnamed Centrist Alliance (a bunch of malcontents around talk show host Vassilis Leventis), the neo-Fascist Golden Dawn and the Communist Party. The die-hard rebels from Syriza, rebranded as “National Unity”, are polling only 3%. “Who on earth can we still vote for?” Greek political commentator Nick Malkoutzis argued despairingly in a recent editorial for the German newspaper Die Zeit.

 

The polls might suggest Greeks want a broad and solid coalition to shepherd them through what are sure to be another four years of economic pain and hardship. But both Tsipras and New Democracy leader Vangelis Meimarakis have ruled out working together. Whichever one emerges ahead on Sunday night will therefore almost certainly have to pick two of the other pro-euro, pro-bailout parties likely to cross the 3% threshold: To Potami (the River), the center-left PASOK and, perhaps, Leventis’ Centrists.

The lucky winner will be required to pass, within a month, most of the measures that Tsipras and, before him, Antonis Samaras and George Papandreou found too unpalatable: curbing pensions, ending tax privileges for special interest groups and selling state assets. Also in October, the European Central Bank will tell Greece how much it needs to plug the holes in the balance sheet of the banking system. If the tab is more than the €25 billion foreseen in the third bailout, then Greece’s depositors could find themselves with the kind of “haircut” they were looking to persuade the creditors to accept eight months ago.

All this, of course, in the context of a debt burden that continues to crush the life out of the economy, a disastrous flight of human and financial capital, and an overwhelming flood of refugees and migrants arriving every day.

Tsipras and Meimarakis could be forgiven for thinking this would be a good election to lose.