Sep 21st, 2015, Greece gradually returns to European normality

·         In contrast to all polls which were showing a neck-and-neck battle, Tsipras managed to win elections by 7.5% points vs. New Democracy (35.54% vs. 28.03%), and maintained last January’s popularity and stayed in power.  

·         Greece’s new Parliament will consist of 8 political parties; the Centrist Union which is a pro Europe, one-man-show political party managed to enter the parliament after three decades of political struggle.   

·         The new Eurosceptic party named Popular Unity ,which was formed after SYRIZA’s rupture, failed to surpass the threshold of 3% and stays out of parliament.

Risk assessment.

·         Greece’s risk profile further improves after elections. SYRIZA and Independent Greeks will form government based on the pro Europe agenda which is included in 3^rd MoU. This is development of immense importance, considering fluid regional geopolitics and local deteriorating economic conditions.  Although implementation risk remains, it follows a decreasing trend.
 

·         These elections are considered as Tsipras’ personal political victory. Tsipras thrashed political opponents, eurosceptics and pollsters.  

·         The new Parliament is more centrist and more pro Europe compared to previous one. In addition, SYRIZA and Independent Greeks can form government and will be supported by other pro Europe political parties, in case of crucial legislation regarding structural reforms. However implementation risk remains especially in areas such as privatisations, farmers and pensions. 

·         Greece’s pro Europe parliament is in line with local public opinion which favours euro (70-80%). This is translated to a gradual transition from previous vote of protest to a comparatively more rational one.

·         Although some of Friday’s polls were showing SYRIZA’s lead by 3%, this was not the case during the pre-election period during which they were showing a neck-and-neck battle. Once more local pollsters failed to predict results during pre-election period. The same applies on exit polls which were showing SYRIZA’s narrow lead with overlapping vs New Democracy. 

·         In brief, yesterday’s elections brought to surface three surprises:

1.        SYRIZA’s lead by 7.5% points despite the U-turn which occurred as regards the July 13^th agreement and 3^rd MoU.

2.       SYRΙZA’s ally Independent Greeks (nationalists) managed to surpass the 3% threshold (3.67%) and enter parliament, despite polls of all previous weeks which were showing the opposite.

3.       The new Eurosceptic, ex-SYRIZA political party named LAE failed to surpass the 3% threshold (2.6%) and was left out of parliament. This occurred despite the fact that a significant number of former SYRIZA’s executives, the significant number of its Central Committee and the majority of its Youth's Central Council were supporting it. For instance, the former Finance minister Varoufakis, the former minister of Energy Lafazanis, the former minister of Pensions Stratoulis and most importantly the Former Speaker of Commons Constantopoulou, the ex MEP and Leftish icon Glezos were among LAE's supporters/candidates. 

·         New Democracy (centre right) has lost elections but slightly increased its popularity vs last January’s one (28.03% vs 27.81% in January). It lost elections mainly to the following reasons:

1.       Despite the fact that the 3^rd MoU represents Tsipras’ U-turn, he achieved to neutralise ND’s competitive advantage which was its pro Europe stance.     

2.       ND is still an old-fashioned political party, which is dominated by various local and country-level Barons.

3.       Its political message needs to adjust to new conditions i.e. refugee crisis, social inclusion, unemployment, youth, Balkans etc.

4.       ND’s leader performance was better than expected. However, he was not a new face in local politics and appeared as he had a special purpose role (he didn’t achieve to change any candidate).  

 

5.       Greece centre right will go through a significant restructuring process, in the coming months.

·       the other pro-reform, pro Europe, centre left/liberal party named Potami suffered significant losses vs last January, despite the inclusion of significant number of famous professionals, academics and politicians. It becomes obvious that being professionally competent and successful, doesn’t make automatically a well-accepted politician.

 

·         Last but not least, abstention increased to levels close to 45% which represents a historical high. It becomes evident that the significant number of elections (7 parliamentary elections, 1 referendum, 3 municipal during the last 11 years) have caused a fatigue to local electorate.