The leader of Greece’s opposition New Democracy party conceded defeat Sunday as preliminary results of snap elections came in.
“The election result, it seems shows that the first party is Syriza and (Alexis) Tsipras. I congratulate him,” New Democracy party leader Vangelis Meimarakis said.
With 30% of the votes counted, preliminary results from Greece’s Interior Ministry showed left-wing Syriza in the lead with 35.5% of the vote, conservative New Democracy with 28% of the vote and Golden Dawn with 7.2% of the vote.
As the results came in, a key question loomed: With no one poised to win a clear majority in Parliament, will party leaders be able to form a coalition?
The leader of the right-wing Independent Greeks party Panos Kammenos told reporters that his party would ally itself with Syriza.
But the final vote tally hasn’t been announced yet. One thing is clear: The economically frail country doesn’t have time for a fresh round of political uncertainty.
‘Greece is not sustainable’
Athens needs a government to tackle its struggling economy, keep the bailout on track and try to deal with the challenge of thousands of migrants arriving on its shores.
Unless a new government gets to work quickly, Greece risks being unable to get more money from Europe. That would leave it unable to pay 3.2 billion euros ($3.8 billion) it owes to the International Monetary Fund later this year.
“Greece is not sustainable and the big issues are how far the program will go off track and how many eurozone members will join Germany in viewing missed targets as no longer a price worth paying,” said Gabriel Sterne, the head of global macro research at Oxford Economics.
The rescue agreed to in July with Europe — worth up to 86 billion euros ($97 billion) — prevented financial collapse and kept Greece in the euro.
New bailout, new elections
Before the election, both Syriza and New Democracy said they were committed to reforms Greece has to implement in order to receive more bailout cash promised by European countries. The rescue deal was reached after last-ditch crisis talks in July as the Greek financial system teetered on the brink of collapse and the possibility of the country leaving the eurozone loomed.
It was Syriza’s leader, Tsipras, who accepted the terms of the new bailout, disappointing many of his left-wing supporters.
Tsipras became Prime Minister after winning elections in January with pledges to get some of Greece’s huge debt burden written off and roll back unpopular austerity measures.
But he was eventually forced to back down as EU leaders refused to budge and the Greek economy sank deeper into the mire.
After having to rely on opposition lawmakers to secure parliamentary approval for the rescue package, Tsipras resigned as Prime Minister last month and called for early elections. He said he wanted the Greek people’s support to take the reform program forward.
His party’s main challenger, New Democracy, argued that it was better qualified to implement the measures called for by the latest bailout.
Economy expected to shrink
Regardless of the result, the IMF says Greece desperately needs “substantial” debt relief. Without it, the country may once again find itself unable to pay its bills in the long term.
Europe has been unwilling to talk about that, saying the first review of Greece’s economic reforms takes precedence.
Meanwhile, Greece’s economy remains in a fragile state after the chaos of the summer.
Capital controls are still in place, its industrial base has shrunk, and unemployment has been hovering around 25%.
“We’ve seen a big drop in economic sentiment; we’ve seen big drops in imports and exports, so there’s likely to be a big slowdown in the economy,” Raoul Ruparel, a director of Open Europe, told CNN.
Greek GDP is expected to shrink by 2.3% this year and by 1.3% next year.
And the disruption brought about by yet another round of voting isn’t helping matters.
“Nothing is happening in the political sphere and that means nothing can happen in reforming the economy,” Ruparel said.
