Whichever party wins Greece’s national parliamentary election on Sunday will face an uphill task: inheriting a central government nearly out of cash, an economy in free fall and a restive public tired of austerity measures.
Greece’s conservative leader Antonis Samaras, in his final rally before national elections on Sunday, said the euro currency represented an “anchor” of stability for the country and warned that Greece’s recession-ravaged economy couldn’t withstand the shock of further political uncertainty.
“The fate of the country will be decided by the answers the people give to seven crucial dilemmas,” Mr. Samaras told several thousand supporters in a main square of the Greek capital. “The first of those that will be decided the day after tomorrow is the dilemma of the euro or the drachma.”
The rivals are poised to become the two largest parties in Greece’s 300-member Parliament, but whoever finishes first will gain a 50-seat bonus and significant advantage in forming a government.Sunday’s elections are being seen as a de facto referendum on Greece’s future with the euro, pitting Mr. Samaras’s New Democracy party—which mostly supports the country’s latest European-led bailout—against their leftist rival, Syriza, which has denounced the deal and wants to tear up the austerity program that came with it.
If New Democracy finishes first, it will likely team up with the third-place Socialist Pasok party, which also supports the bailout. If Syriza finishes first, it could be joined by the small, antiausterity Democratic Left party, giving the two potentially just enough seats to form their own coalition.
In either case, those majorities are likely to be thin and may not survive the tough decisions that lie ahead.
The conservatives came first in May’s inconclusive elections but lacked an outright majority to form a government. Efforts at forming a coalition government failed after more than a week of negotiations.
In the event that coalition talks stumble this time too, Mr. Samaras called for a national unity government, saying the economy, the banking sector and the community can’t withstand another round of elections.
“If there is no government in coming days, the most likely outcome is that we have won’t have time to go to new elections,” he said.
Greece’s reform program is already well off track, following weeks of political paralysis. The first task facing Sunday’s winner will be to come up with €11.5 billion ($14.5 billion) of new austerity measures being demanded by the country’s European and international creditors in exchange for further financial aid.
If Greece’s new leaders are unable, or unwilling, to meet the conditions imposed as part of a €173 billion bailout from the European Union and International Monetary Fund, Brussels could pull the plug on aid, effectively pushing Greece out of the common currency.
Stay or Go?
The two candidates in Greece’s election differ broadly on the euro.
Background: Conservative New Democracy party leader, 61-yearold Harvard-trained economist.
Platform: Hopes to renegotiate Greece’s bailout program with the euro zone and the International Monetary Fund to make it milder, but not fundamentally different.
If He Wins: Sighs of relief from Brussels to beyond, given his pledge to keep Greece in the euro and merely tweak its bailout.
Background: Radical leftist Syriza leader, 37-year-old who rose through ranks of the Communist party youth.
Platform: Wants to tear up the script and get rid of Greece’s austerity and structural-reform commitments to Europe and the IMF altogether—but keep Greece in the euro.
If He Wins: Confidence in membership in the euro will wane, a worry for investors that could prompt action by the ECB.