Greece Rejects Syriza
Syriza was a coalition of left-wing parties which has ruled Greece since 2015 when the patience of the Greek people with the nation’s traditional parties wore out. Greece had been reeling from the combined effects of the Global Financial Crisis and the discovery that its government had fudged the figures for the economy to allow it to join the Euro in the first wave of entrants. The fact that Greece did not actually meet the convergence criteria to join the Euro in the first place led to it being charged unsustainable amounts to finance its borrowing on international money markets and triggered the European sovereign debt crisis which, at one point, threatened the future of the Euro itself.
Greece was forced to approach other Eurozone nations and the International Monetary Fund to secure affordable funding of its borrowing needs, but the loans came with caveats designed to restore the Greek economy to a sustainable trajectory. This involved very significant cuts to public expenditure (notably having an impact on pensions and social security expenditure) and reforms to state owned firms, requiring increased privatisation. Needless to say, they were very unpopular with Greek citizens and ultimately led to the election of a radical left-wing government that promised to end austerity and get the creditors to offer significant write-offs of Greek debt. Ultimately, this policy was doomed to failure and rather than risk crashing out of the Euro (remember Grexit?), the government was forced to honour obligation made by its predecessors and found limited room to mitigate austerity.
Following a poor showing in local and European elections, Alexis Tsipras, the Greek PM decided to bring forward elections and held a snap poll last weekend. The result was that Syriza was swept from power.
The new government in Greece will be led by Kyriakos Mitsotakis of New Democracy, a centre-right party which won a landslide on Sunday. New Democracy won 39.85% of the poll with Syriza’s support falling to 31.5%, meaning it will have an absolute majority in the new parliament. New Democracy has promised to lower taxes, increase privatisation of public services and hopes to renegotiate a deal with its creditors that might boost inwards investment.