Making social science accessible

19 Jul 2023


Manos Matsaganis reflects on May’s Greek general election, what lies behind New Democracy’s success , and the challenges facing the new government.  

That the centre-right New Democracy was going to poll better than the radical left SYRIZA at the general election of 21 May 2023 was widely predicted. It was the size of the lead that took everyone by surprise (including party leaders with access to confidential opinion polls): 40.8% vs 20.1% respectively. Rather unusually for an incumbent, New Democracy’s share of the vote rose relative to July 2019. Even more unexpectedly, support for SYRIZA collapsed (down from 31.5% at the previous election).

What came next was typical of Greece’s adversarial politics and electoral traditions. While the government of the day can no longer change the electoral law with immediate effect, it can still determine do so for the election after next, tempting incumbents to engage in complex strategic calculations. Alexis Tsipras, SYRIZA leader, PM in 2015-2019, had introduced proportional representation shortly before leaving office in the expectation that it would complicate Mitsotakis’s bid to remain in power in 2023. This much was true: New Democracy fell short of an absolute majority in Parliament. But with no realistic chance of a coalition government, Kyriakos Mitsotakis, PM and New Democracy leader, called a snap election on 25 June 2023, under a less proportional electoral system, which inflates the leading party’s share of MPs relative to its share of the vote. At the new poll, SYRIZA’s gambit backfired: on a lower turnout, New Democracy’s vote held (40.6%), while SYRIZA’s fell lower still (17.8%). As Tsipras handed in his resignation as party leader, Mitsotakis returned to office at the helm of a single-party government.

What explains the centre-right’s triumph, and the radical left’s rout? In retrospect, it seems voters grew tired of the opposition’s shrill rhetoric, and opted for the ‘return to normality’ promised by the government. Mitsotakis is generally perceived to have raised the level of competence in office, to have handled successfully a number of emergencies (from Covid-19 to Erdogan’s threats to Putin’s war), and crucially to have put the economy back on course. Growth has been faster than elsewhere in the EU, unemployment is down, exports are up.

The blemishes on the government’s record (the wiretapping scandal, the train crash of 1 March 2023 in which 57 people lost their lives, the drowning of hundreds of migrants on 14 June 2023 when the fishing boat on which they hoped to reach Italy capsized off the Peloponnese) appeared to have left less of a mark on voting intentions.

Clearly, that voters chose to overlook the scandals and the tragedies begs the question rather than answer it. Public opinion in Greece is notoriously hostile to migrants, with large majorities (64.1% in 2022, according to a survey) favouring a ‘stricter’ stance, and therefore implicitly approving the current government’s policy of ‘deterrence’.

Leaving aside for a moment the dubious morality of refusing assistance (or worse) to desperate people risking their lives in search of a better future, one could also question the wisdom of closing the door to migrants, given the country’s relentless demographic decline. There is, however, little doubt that the electoral payoff of an anti-immigrant stance is considerable, while the risk of electoral punishment when the inevitable accident occurs remains negligible.

Early in his first stint in office, Mitsotakis, the most liberal leader New Democracy ever had, chose to appease the right wing of his own party by effectively ceding control over migration policy to ultra conservatives. The companion argument, that this also happened to be the most effective way to forestall the rise of a competitor party on New Democracy’s right flank, has now fallen by the wayside: not one but three parties of the extreme right have now entered Parliament, ranging from the rabidly pro-Putin to the outright neo-Nazi, polling a combined 12.8% of the vote.

The challenges facing the new government are considerable. Until not so long ago, Turkey’s Erdogan often resorted to open threats to invade Greece (“We will come at night”). More recently, the Anatolia earthquake, his own re-election, and Putin’s debacle in Ukraine, had softened this posturing. Then suddenly, at the NATO summit in Vilnius (11-12 July 2023), the only plausible route to more permanent détente (the resolution of Greek-Turkish differences through international arbitration) was back on the political agenda.

Assuming the geopolitical outlook does not darken, the government’s fate over the next four years is likely to be decided by its economic record. Business sentiment has certainly improved, boosted by a couple of good seasons for tourism, estimated to contribute almost half of all exports, as well as a quarter of all jobs and a fifth of GDP. Nevertheless, dependence on tourism is problematic in the short-term (most jobs in tourism are temporary and low paid), and unwise in the longer-term (tourism is vulnerable to geopolitical risk and rising temperatures). Meanwhile, the goal of transitioning to a more dynamic, export-oriented economy remains elusive.

As the Greek economy reverts to the path of least resistance, the current account deficit has reached 10% of GDP in 2022 (up from less than 1% in 2013-2015). This is alarming, and a reminder that the national economy struggles to move to a better spot internationally. After all, economists from across the spectrum of opinion now agree that what all countries getting into trouble during the Eurozone crisis had in common was external imbalances, not fiscal ones.

Still, Greece is not due to face another debt crisis anytime soon: its foreign debt is mostly held by official lenders, average maturity is long, interest rates are low and mostly fixed. A combination of a reasonably prudent fiscal policy and moderate inflation would ease the country’s debt burden as a share of GDP.

From the vantage point of ordinary Greeks, the litmus test will be real incomes. These have grown faster for the nearly one third of the workforce who are employers or self-employed. For most employees, the remaining two thirds, stagnant wages (following the significant cuts of the early 2010s) were bad enough when inflation was low; now that prices rise faster, their discontent is palpable.

By Manos Matsaganis, Professor of Public Finance at Polytechnic University of Milan, and Head of the Greek and European Economy Observatory at ELIAMEP (Hellenic Foundation for European and Foreign Policy) in Athens.


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