Greek voters are returning to the establishment parties that negotiated its bailout, a poll showed yesterday (17 May), offering potential salvation for Greek people concerned about the impact of a return to the Drachma over their personal savings.
The poll, the first conducted since talks to form a government collapsed and a new election was called for 17 June, showed the conservative New Democracy party would win 26.1% of the vote compared to 23.7% for the radical leftist Syriza party, which has pledged to tear up the bailout.
Crucially, it showed that along with the Socialist PASOK party, New Democracy would have enough seats to form a pro-bailout government, which it failed to win in an election on 6 May, forcing a new vote and prompting a political crisis that has put the future of the euro in doubt.
Threat of bankruptcy
EU leaders say that without the bailout, Greece would be headed for certain bankruptcy and ejection from the common currency, which would sow financial destruction across the continent. The prospect that Syriza would win the election has sent the euro and markets across the continent plummeting this week.
The threat of a bank run seemed to materialise earlier this week when George Provopoulos, head of the Greek central bank, told President Karolos Papoulias that Greeks had withdrawn as much as €700 million from their personal bank accounts, Bloomberg reported.
“Provopoulos told me that of course there’s no panic but there’s great fear which can evolve into panic,” Papoulias said. "The ECB needs to step in to guarantee the deposits of the regional lenders to fend off contagion," Yannis Ioannides, economics professor at Tufts University, told Bloomberg TV.
The extraordinary statement by the Greek president that the country may already be subject to a run can easily become a self-fulfilling prophecy, warned Eurointelligence, an economic commentary and analysis website run by Financial Times associate editor Wolfgang Münchau.
Greek voters fickle
The election is still a month away, and Greek voters have been fickle. Experts warned against drawing any strong conclusions from a single poll. Nevertheless, a trend that had shown Syriza surging ahead appears to have turned.
"It seems people vented their anger in the election and then they got scared. They disliked that there was no government and they got worried about a possible exit from the euro," political analyst John Loulis said of the surprise poll result.
"Still, voters are far from enthusiastic with New Democracy. Things are still volatile. The outcome of the elections will depend on who will make the fewest mistakes."