News Column

Greece's Parties end Election Campaign

June 15, 2012

Greece's political parties ended their parliamentary election campaigns Friday in a repeat vote which will prove decisive for the country's future in the eurozone.

Stocks continued their upward trend at Athens' Stock Exchange, indicating that investors hoped the vote would produce a pro-bailout government that adheres to strict austerity reforms and keeps the country in the 17-member bloc.

The main stock index closed 1.85 percent higher at 560.26, after closing 10.1 percent higher on Thursday, which many analysts saw as a reaction by investors to unofficial opinion polls.

Public opinion polls cannot be conducted in the two weeks prior to elections according to Greek law.

Greeks return to the polls Sunday, after no outright majority emerged in elections last month. Conservative New Democracy and the radical left-wing SYRIZA party are head-to-head, according to the latest surveys.

SYRIZA has pledged to replace the country's loan agreement with another plan to stabilise the economy if elected, saying the current bailout is killing the weakened economy.

Addressing a few thousand supporters in Athens' central Syntagma Square, New Democracy leader Antonis Samaras said: "We aim to renegotiate the memorandum, introduce growth-inducing measures."

"A return to the drachma would take Greece 50 years back ... a victory for SYRIZA would result in a worse memorandum for the country," he added.

Speaking at his main pre-election rally in the Greek capital a day earlier, SYRIZA leader Alexis Tsipras had warned speculators not to bet on Greece's euro exit.

"The memorandum of bankruptcy will belong to the past on Monday," he told a crowd of several thousand supporters, promising to rip up the conditions attached to the bailout but keep Greece in the eurozone, should he be elected Sunday.

On Friday, caretaker Prime Minister Panagiotis Pikramenos told his administration's final cabinet meeting that there were critical issues pending that required immediate decisions in the coming weeks.

Greece reportedly only has enough funds to pay salaries and pensions until the end of July unless the new government adheres to strict austerity measures demanded in exchange for bailout loans from the European Union and International Monetary Fund.

"There is dangerous inertia in critical state areas such as tax collection," he said, warning that difficult times lay ahead for Greece's vital tourism industry, which has seen a sharp drop in visitors compared to last year.

Anger at salary cuts and tax hikes led voters to punish the two mainstream parties, New Democracy and socialist PASOK, in May 6 elections, turning to smaller radical parties instead.

Greece risks having more than 1.5 million unemployed if "immediate and urgent measures" are not taken by the end of the year to revive the battered economy, Greece's largest union warned Friday.

"There has to be an immediate change in the production model and implementation of development policies to reduce the dramatic impact of the crisis," the General Confederation of Greek Workers said, without going into detail.

Unemployment has been rising steadily as the country grapples with austerity measures designed to address its debt crisis, placing the country in its fifth year of recession.

The unemployment rate rose to a record high of 22.6 per cent in the first quarter of 2012, up from 20.7 per cent in the previous three-month period.

The jobless rate in the first quarter of 2011 was 15.9 per cent.

Despite a law which assigns the party with the most votes an additional 50 seats in the 300-seat parliament, it is still highly unlikely that any one party will win enough seats for an outright majority.

Analysts predict that parties will be hard-pressed to form a governing coalition, while the country cannot afford to hold repeat elections.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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