Greek Opposition's Win Opens Neoliberal Path, Economic Relief Prospects Still Uncertain

The victory of the opposition New Democracy (ND) party in the Greek parliamentary elections signifies the overburdened nation's desire to switch to more neoliberal economic policies, which however may not necessarily bring the long-awaited relief to ordinary people and could turn into another "version of austerity," experts told Sputnik

MOSCOW (UrduPoint News / Sputnik - 11th July, 2019) The victory of the opposition New Democracy (ND) party in the Greek parliamentary elections signifies the overburdened nation's desire to switch to more neoliberal economic policies, which however may not necessarily bring the long-awaited relief to ordinary people and could turn into another "version of austerity," experts told Sputnik.

In Sunday's elections, the ruling left-wing Syriza party lost to the center-right ND, which gained around 40 percent of the vote. The opposition's victory did not come as a surprise as most of the polls projected that the vote would repeat the outcomes of recent elections to the European Parliament and local legislatures that resulted in Syriza's defeat.

On Wednesday, Kyriakos Mitsotakis, the ND leader and new Greek prime minister, held his first cabinet meeting, during which he pledged that his government would submit a tax cut bill to the parliament in the coming weeks.

RETURN TO 'MAINSTREAM' LIBERAL ECONOMIC POLICIES

According to experts, the ND's victory signals that Greece is going to switch to more neoliberal policies in the hope to take a breather from the taxes introduced under the previous government.

"What the New Democracy victory signifies is a turn towards more neoliberal economic policies. It also reflects a partial return to the mainstream politics that dominated the Greek political landscape up to the beginning of the financial crisis," Vasilis Leontitsis, a senior lecturer in globalization studies at the University of Brighton, told Sputnik.

Dimitris Tsarouhas, a professor at the Bilkent University and Greek Politics Specialist Group of the British Political Studies Association, in turn, opines that it was Syriza's failure to "live up to its pre-election promises, especially regarding anti-austerity that lead to its defeat."

"The previous government overburdened the middle class and ND promised tax cuts to relieve the pressure on households and business alike," Tsarouhas told Sputnik.

Mitsotakis, the expert suggests, is therefore likely to" introduce a more business- and investment-friendly administration," creating a "more technocratic" cabinet.

Theofanis Exadaktylos, a senior lecturer in European politics at the University of Surrey, however, believes that the return of the center-right government does not inevitably guarantee economic relief for ordinary Greeks, tired of years of austerity.

"The return of New Democracy to power signals a return to centre right/right-wing driven policies. That is likely to mean that the much heralded agenda of stability is likely to turn into a new version of austerity rather than relief for the average Greek," Exadaktylos told Sputnik.

Given the strong mandate, the new government will be obviously able to push through some of the reforms in health, education and the wider public sector, however "promised tax cuts may not be feasible at the moment as savings need to be found from elsewhere," according to the expert.

Describing Mitsotakis as a "promising political figure with experience in public administration," Exadaktylos stressed that his team should be similarly "dedicated to pushing reforms and ensuring that they do not get engaged in clientelistic politics and return to old-style politics that brought the country to the brink of bankruptcy back in 2009."

Dwelling on the election results on the whole, experts noted that even though the ND improved its results, Syriza's loss was "not as heavy as initially expected," which gives hopes that it will consolidate itself and be active in opposition.

Another notable takeaway from the election is that the far-right Golden Dawn party, which had 18 lawmakers in the outgoing 300-member legislature, became "the biggest loser," according to Leontitsis of the University of Brighton.

"It narrowly missed the 3% threshold and it will not be represented in the current parliament. This is a great victory for Greek democracy," he added.

Exadaktylos suggested that the main reason behind the Syriza's loss was its failure to deliver on its anti-austerity promises. Its government, the expert believes, "also paid a price" for the contentious name change deal with Skopje, especially in "northern Greece, where ND's victory was larger than elsewhere.

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"The outcome of the election, although it is an overall victory for New Democracy, was not exactly what New Democracy was hoping for. The difference with Syriza is not as wide as expected and Syriza managed to contain their losses. That gives Syriza the advantage to become a strong opposition party, ready to mobilise the people in unpopular measures and create disruption in the smooth governing of New Democracy," he added.

Speaking about foreign policy of the incoming government, experts agree that it "will be more EU and NATO friendly."

"New Democracy is friendlier towards the EU institutions than SYRIZA. Thus, I expect a smoother relationship with the EU and its main member states. It has just been announced that the new Greek prime minister is going to visit Berlin in the end of August; one of his first trips abroad. This is quite important, since it signifies a warmer relationship with Greece's main European partners," Leontitsis of the University of Brighton said.

Bilkent University professor Tsarouhas, in turn, expects that politically relations with the European Union will indeed "remain close and solidaristic," stressing, however, that "this is immaterial" amid persistent budget and economic policy differences.

"What matters more is whether the creditors will accept to reduce the 3% Primary budget surplus; if it remains as high the government will have a tough time ahead," he projected.

Exadaktylos, an expert in European politics at the University of Surrey, agrees that the high probability of more cordial political dialogue does not entail that Europe will stop its "direct monitoring" of Greece's economic policies.

"That does not mean that the EU will let him [Mitsotakis] off the hook and allow him too much flexibility in the austerity agenda previous governments have signed up to," he concluded.

At the same time, Mitsotakis will need to "reposition Greece" in the bloc as a "strong country and not a pariah state and a peripheral country" and restore its reputation, according to the expert.

Meanwhile, the new government will also inevitably have to tackle at least three thorny foreign policy issues.

Fist of all, the expert highlights the issue of the name deal with neighboring North Macedonia, criticized by the ND party but welcomed by Brussels as something that opens for Skopje door to both the European Union and NATO.

Secondly, migration flows and refugees will remain another salient issue for the Greek electorate, forcing Mitsotakis to secure more support from the bloc to tackle the challenge.

"Failing to do so may mean that some of his more right-wing supporters may fall back to the trap of Golden Dawn or the new ultra-right party Greek Solution that made it to parliament," Exadaktylos warned.

Finally, the new prime minister, expert says, will need to "protect Greek national interests" amid the dispute over gas and oil exploration off Cyprus' coast and press for more support from Europe in the issue.

Zoe Lefkofridi, an associate professor of comparative politics in Division of Political Science and Sociology at the University of Salzburg, in turn, believes that the "direction Greece will go" depends on the internal balance in the NP party.

According to the professor, though the far-right electorate has "been absorbed" by the ND in the Sunday elections, there is still a sort of a pact between the center-right and far-right, which is reflected in the appointment of whom she describes as far-right politicians at the helm of the ministries of agriculture and Investment.

"The party New Democracy comprises neoliberalists but also hard core nationalists and the president must keep the balance between these two distinct rightwing camps ... If the nationalists dominate then we can expect deterioration with N. Macedonians," she said.

As an example she recalled that the new prime minister's father, Konstantinos Mitsotakis, who was at the helm of the Greek government in the 1990s, was neoliberal and "in favor of a trade-related solution," while then-Foreign Minister Antonis Samaras "took a very nationalist line and called for rallies to defend the name Macedonia" only for the Greek region.