Greeks voted Sunday in a tough-to-predict general election that threatened to turn the crisis-hit country’s old political system on its head and bring eurozone turmoil back with a vengeance.
After two years of austerity cuts, polls indicate that voters are set to punish Greece’s two main parties, the left-wing Pasok and conservative New Democracy, for having promised painful austerity cuts in return for two bailouts worth 240 billion euros ($314.0 billion).
Instead, around half of the vote could go to 30 smaller parties from across the political spectrum, making the formation of a new government by likely poll winner Antonis Samaras of New Democracy (ND) a tall order.
“I am going to vote one of the small parties. I have had enough of ND and Pasok,” psychology student Maria, 22, said on her way to vote. “Ever since I was born people have just voted for them.”
Both Pasok and ND have said they want the “troika” of the European Union, International Monetary Fund and European Central Bank to cut Greece more slack in their bailout deals.
For many of the smaller parties this does not go far enough.
“We need to break from this corrupt political system of lackeys of foreign imperialism,” Petros Alachmar, 31, an activist from the far-left Syriza party, told AFP. “We have had enough of austerity measures.”
Greece’s creditors, not least paymaster-in-chief Germany, the main proponent of austerity before growth -- despite growing criticism -- have little appetite to loosen the bailout terms, let alone consider a third rescue.
With Athens having committed to finding in June another 11.5 billion euros in savings through 2014, any ambition to renegotiate terms “suggests a degree of liberty they do not have,” Swiss bank UBS said in a research note.
In ominous comments widely quoted by Greek newspapers on Saturday, German Finance Minister Wolfgang Schaeuble said that if Greece’s new government deviated from its commitments, the country would have to “bear the consequences.”
“Membership of the European Union is voluntary,” he said in Cologne.
As a result, it is Greece’s vote rather than France’s presidential election, also on Sunday, that “weighs heavier” on investors’ minds, said Valerie Plagnol, Credit Suisse director of research.
Holger Schmieding, economist at Germany’s Berenberg Bank, said there was a 40-percent risk of Greece leaving the eurozone this year, with a “high” chance that no stable government willing to implement more reforms can be formed.
Outgoing technocrat Prime Minister Lucas Papademos has warned that the election will determine Greece’s future for decades, a sentiment echoed by Evangelos Venizelos, the head of Pasok and former finance minister.
Like Greece, Portugal and Ireland have received international bailouts, and the economies of Italy and Spain are also struggling.
For a while last year, there were even fears for the future of the eurozone, and while these have subsided in recent months, they have not completely disappeared.
Greece has already written off a third of its debts and is in its fifth year of recession. One in five workers is unemployed, its banks are in a precarious position and pensions and salaries have been slashed by up to 40 percent.
Voters are also fed up with corruption and cronyism. Immigration has also become an issue, raising the prospect that the neo-Nazi Golden Dawn party may enter parliament for the first time in nearly 40 years.
Surveys show that despite Greece’s difficulties, a huge majority of more than 70 percent want to stay in the eurozone and the European Union.