Today, Greeks are going to choose a new government for the consecutive time since 2009, when the economic travails in the country began. However, this time is different for one very special reason: Greece is going to choose its geopolitical path for the rest of the century – in or out of Europe.
The election will have some major political and economic implications, not only for Greece, but also for the rest of the world.
On the one hand, we’re seeing a resurgent left in Europe, which began with the victory of Francois Hollande in France. The deeply populist Alexis Tsipras, leader of the far-left Greek Syriza movement, is the manifestation of the nation’s discontent with political and economic collapse.
On the other hand, the right-wing New Democracy is the pro-European party, willing to maintain the stifling austerity Greece has been subjected up to this point in exchange for the bailout packages it receives.
Syriza promises to put an end to austerity, to dissolve the bailout arrangements, to nationalize and to keep Greece inside the euro zone. The problem is that Greece has already received hundreds of billions that Europe will in all likelihood want paid back if Syriza wins the elections. In that scenario, we’re right back to square one. What’s more, staying inside the euro zone might not be viable if Syriza’s plans go through, because the stability of the rest of the euro zone is at risk if Greece’s political and economic policies become unpredictable. Spain or Italy may react with similar political developments as a consequence.
The question is, then, which is the blacker devil – a victory for Syriza will quickly deflate the balloon Tsipras is blowing up and put him right back on the negotiating table in Brussels. New Democracy is advocating for the painful solution of long-term stability paid through short and medium-term costs of more austerity, downturn and high unemployment. The risk here is that Greece’s human capital and potential may be damaged for generations, because many professionals will emigrate and take their money with them. Any other country in the Balkans can be a reference point for what this kind of scenario looks like in practice.
Geopolitically, Syriza offers a diplomacy of hot air that will inevitably meet cold reality sooner than later, and Greece will be subjected to informal international isolation for a very long time, because no other political, economic or financial actors will trust the country enough to support it. New Democracy offers a slightly better alternative – at the price of the next 2-3 generations, keeping Greece above water, but turning it into a diplomatic midget for the long-term as well, with the redeeming quality that international trust will return sooner than the perspective Syriza offers.
Polls close at 12 p.m. EDT, and results should take one or two hours to be counted.
PolicyMic will be following the results of the Greek election live. Bookmark and refresh this page for live updates (all times in EDT).
Sunday 4:54 pm:
Although official projections late Sunday showed that no party will win enough seats in the 300-member parliament to form a government on its own, Greece's two traditional parties — New Democracy and PASOK — will have enough seats to form a coalition together.
"The Greek people today voted for Greece to remain on its European path and in the euro zone," New Democracy leader Antonis Samaras said, adding that voters chose "policies that will bring jobs, growth, justice and security. "
His party beat Syriza, which wanted to cancel Greece's international bailouts.
Sunday 4:38 pm:
Sunday’s vote has been framed as a referendum on Greece's €130 billion bailout deal by Greece’s euro zone partners and the International Monetary Fund (IMF). New Democracy, which is poised to a slender victory, supports the deal but has promised to renegotiate parts of it.
Sunday 4:28 pm:
Though Syriza's leader Alexis Tspiras called New Democracy's Antonis Samaras to congratulate him, there is little sign the anti-bailout crusader will be conciliatory in the days and weeks ahead as he still holds the view that the bailout measures are not ''a viable plan'' for Greece. Tspiras vowed to ''continue the struggle'' against Austerity.
Sunday 3:45 pm:
The Associated Press has reported that the head of Greece's socialist Pasok party, which is projected to come in third in Sunday's critical election, has proposed that Greece form a unity government of four top parties.
Official projections show the conservative New Democracy party as coming in first with about 129 of Parliament's 300 seats, ahead of anti-bailout Syriza party. New Democracy and Pasok could form a pro-bailout coalition.
But Pasok's Evangelos Venizelos, who spent months as finance minister, suggested that the usual procedure of each party seeking coalition partners be waived. He said a government must be formed quickly and suggested one between New Democracy, Syriza, Pasok and the small Democratic Left.
Sunday 3:30 pm:
Now that Syriza's Alexis Tspiras has reportedly called New Democracy's Antonis Samaris to congratulate him for the results of today's elections, and that Samaris has already given his victory speech, it all comes down to the new coalition talks and Syriza's willingness to either from Samaris' "grand coalition" or stay the course of its staunch anti-Austerity stance and become an even stronger opposition to ND now that their performance at the polls improved.
Sunday 3:07 pm:
From The New York Times:
"With the race expected to remain close, world financial institutions braced for more political uncertainty and market turmoil on Monday. Greek political leaders said they understood the need to form a government quickly, no matter what the results. Elections on May 6 failed to yield a government coalition and brought the Greek economy to a standstill."
Sunday 2:55 pm:
Here's Skai TV's live feed for those who speak Greek and want to see the official results coming in:
Sunday 2:48 pm:
After today's results the three main Greek political parties, New Democracy, Syriza and Pasok, must return to the table and resume coalition talks. Syriza, who given how close the election has been, is trying to put its foot down by denying any willingness to form a coalition with New Democracy. Conversely, ND is acting very prime ministerial by offering the possibility of a "grand coalition" with Alexis Tspiras' party. In the meantime, Pasok, which performed better than expected, is going back and forth between forming a coalition or not.
Sunday 2:40 pm:
New Democracy (conservative): 29.5% and +50 seats in parliament
Syriza (anti-austerity): 27.1%
Pasok (socialist): 12.3%
No single party will have enough seats to govern by majority, which means New Democracy must form a coalition.
Sunday 2:20 pm:
While unofficial, Pasok said they will not form any government coalition without Syriza. In the meantime, check out this interactive map with official results pouring in.
Sunday 2:15 pm:
Complete exit polls, by a consortium of Greek television networks, showed the center-right New Democracy party leading the left-wing Syriza coalition by a little more than 1 percentage point. If these numbers become official, that would give New Democracy 127 seats in the 300-seat parliament -- not enough to form a government outright, leading to another round of coalition talks.
Sunday 1:52 pm:
The New York Times is reporting that center-right New Democracy is favored to win a plurality in Greek parliamentary elections, per exit polls and early returns.
In the meantime, Greek state TV estimates that on those exit numbers New Democracy and Pasok could form a coalition. The 300 seats would be distributed as follows:
New Democracy: 127 seats (including a 50-seat bonus for winning)
Syriza: 72 seats
Pasok: 32 seats
Independent Greeks: 21 seats
Golden Dawn: 19 seats
Democratic Left: 16 seats
Communist Party of Greece 13 seats.
Sunday 1:21 pm:
According to seat projections by Skai TV, Syriza wins 28% (124 seats), New Democracy (ND) 27.5% (73 seats) and PASOK 13% (33 seats).
Sunday 1:10 pm:
As public television announces the second voting report will come out shortly, rumors have surfaced about allegedly burned ballot boxes "from a realiable leftist area." Whether this rumors are true or not, online supporters of the Syriza party are already warning that if the difference between Syriza and New Democracy comes down to a few thousand votes, this could be the cause. However, it is expected the second voting report would favor Syriza as it comes from voters who went to the polls later in the day, and these voters tend to be younger and favor the left.
Sunday 12:47 pm:
A Skai TV exit poll has placed Syriza on top of the race thanks to a thin razor-marging that is generating enthusiasm on Twitter, as younger voters -- who were expected to vote late during the day, and who also tend to vote for leftist parties -- could increase Syrizas lead helping charismatic Alexis Tspiras to indeed become the victor in today's elections.
Sunday 12:32 pm:
There is a growing sense among global investors that, whatever the results of today's elections, Grexit is inevitable as neither party has a magic wand to fix decades of lousy fiscal policies and corruption. So today, it comes down to at what speed Grexit will be executed. Investors believe that if the victor of today's elections is New Democracy, the exit would be gradual and slow. On the other hand, if Syriza results the victor, the Greece would be bracing for a fast and abrupt transition to the (new) drachma.
Sunday 12:25 pm:
Greek exit polls are showing the two front runners in the country's elections, New Democracy and Syryza, are tied, in a dead heat, as follows:
New Democracy: 27.5% to 30.5%
Syriza: 27% to 30%
Sunday 12:02 pm: Polls Are Now Closed in Greece -- Today is decision day in Greece and in Europe.
What can we expect immediately after the Greek election results are announced?
Whether Syriza or New Democracy win, expect markets to react quickly.
Asian markets will be the first to move, but the biggest reactions should happen in the European markets and on Wall Street. If Asian and European markets fall, expect a heavy dive on Wall Street Monday morning.
On Friday, Asian stock markets were up for the second straight week on expectations that major central banks in the world would act to tackle deteriorating global economic conditions.
Opinion polls in early June have put pro-bailout New Democracy party and anti-bailout Syriza party at very close margins ahead of the vote. Opinion polls are not allowed in Greece two weeks before the election, so it is unclear if one side has gained momentum in the last few days. Recent secret polls have pointed to a slight lead for the New Democracy party, but they are unlikely to be very reliant.
It is unlikely that either party will win an outright governing majority, and we are likely to see some sort of a coalition (which will only muddle the world reaction even more).
If the two major pro-bailout parties, the New Democracy and PASOK, win enough votes to form a united pro-bailout front, it will be positive for the markets as the probability of a Greek exit would be reduced.
The markets will react negatively if Syriza forms an anti-bailout coalition government as that scenario could lead to the debt-ridden country's exit from the euro zone and intensify the global economic crisis once again.
Sunday 11:56 am:
As polls close in Greece, and everyone from European leaders to the global media, seems to have an opinion about the country's "make or break moment," there is a groing sense that today Greek voters -- who, besides suffering the harsh consequences of Austerity while being criticized by the pundits -- will give the world a lesson on democracy by speaking up their minds and taking control of their own destiny #Greece2012.
Sunday 11:32 am:
As Greeks polls prepare to close, the Twitter hashtag #drachmatization has appeared as an indication that, at least in social media, the possibility of Greece exiting the euro zone is becoming more and more real. Other popular Greek elections-related Twitter hashtags are: #Syriza, #KKE, #Grexit and #radiolondres -- which unnoficially release the results of the recent French presidential election when socialist Francois Hollande was the victor.
Sunday 11:20 am:
As the whole world seems to have an opinion on Greece's "crucial" elections, how do Greeks see themselves? Here, an excerpt from an article written by Greek columnist Nikos Konstandaras:
"...The world may be watching Sunday's elections in Greece with fascination and awe, as one would approach the scene of an accident before the rescue workers arrive, understanding that the vote could push Greece out of the euro and trigger a series of unforeseen consequences for the euro zone and the global economy.
For we Greeks, though, this is a purely domestic affair. The pressures of meeting our creditors' demands for austerity and reform in exchange for life-supporting loans are straining society to breaking point. The vote will stand as a memorial to the breakdown of our political system, so we have too much on our plates to be overly concerned with how others see us.
We are voting because our political parties could not find the courage to work together in the face of a dire national crisis after the inconclusive 6 May election. Then, they could not even agree on the terms of a televised debate. Now, before Sunday's vote, these masters of diplomacy and compromise who cannot talk to each other all promise to renegotiate successfully the terms of our bailout deal with increasingly frustrated partners in the EU and the IMF..."
Sunday 11:10 am: Here’s a play-by-play analysis from PolicyMic Economics Expert John Giokaris concerning how things could pan out after the election:
The only way there’s even going to be a different election result from what the May election produced is if more voters end up voting for mainstream parties instead of fringe parties like the Communists and the neo-Nazi Golden Dawn. The fundamental problem with last month’s result was that it cut up parliamentary seats among seven different parties in such a way that no like-minded coalition majority could be formed. So for the clear majority of Greeks who wish to stay in the euro zone, government officials are hoping that all the recent talk of a Greek exit from the euro zone might scare enough voters to vote for the mainstream parties this time around.
That also presents another contradictory challenge for any coalition government that forms: although the Greeks reject austerity, recent opinion polls show that 8 out of 10 Greeks want to stay in the euro zone. In other words, the public wants the benefits of euro zone membership but refuses to pay the costs that it entails.
Now if the center right New Democracy wins a majority of votes, and has enough seats to form a majority coalition with either the far right Popular Orthodox Rally and/or the Independent Greeks, international concerns will cool down for a while. The New Democracy is pro-EU and has committed to stick to the terms of the bailout, although they may have to be renegotiated (more on that later).
But if Syriza wins a majority and successfully secures a far left coalition government with either the Socialists, Communists, and/or other radical leftists, there could be trouble. Tsipras (a former communist himself) is going so far as to call for not only ending the bailout deal but for the nationalization of all Greek banks, the restoration of all salaries and pensions to their previous higher levels, and bringing back collective bargaining rights. He essentially wants to restore everything that bankrupted Greece in the first place and global markets are reacting accordingly.
Assuming Tsipras does get that far, it’ll then be up to Germany to make the next call. As of now, whatever coalition government forms after the election (if any) has to cut another €11.5 billionfrom the federal budget by the end of June to get the next increment of bailout cash or else Greece’s banks risk default again. The last thing Tsipras is going to do if he becomes the next prime minister is any more spending cuts. He’s going to call Germany’s bluff. It’ll then by up to Germany to decide whether to give the bailout cash to Greece anyway, thereby losing all credibility, or finally cut its losses and let Greece’s banks default.
The EU is now opening up to renegotiating the terms of the rescue agreement. They’re concerned that the austerity measures imposed by the current agreement could spark a disorderly Greek default at a time when several other Eurozone economies are increasingly fragile. The PIIGS (Portugal, Ireland, Italy, Greece, Spain) have definitely not fully recovered from the financial crisis yet, with Spain most recently becoming the fourth of those countries to ask for a bailout. If Italy ends up needing one too – game over. There’s no way the EU would be able to scrounge up enough money to rescue its third largest economy, and Italian banks are exposed to Greek debtand possible default.
So what happens in Greece is obviously not going to stay in Greece. The global ramifications of the next Greek election are real and far-reaching, potentially even affecting the 2012 U.S. election. But the lesson to take in all this is that decades of reckless spending, cradle to grave entitlements, and living beyond your means will blow up your economy to unsustainable levels of debt at which point you will be at the mercy of your creditors.
We’re not far behind our Mediterranean counterparts on the path of out-of-control spending levels and national debt. And if you think China, our creditor, calling the shots around here sounds ludicrous, ask the Greeks if they could have ever predicted the crisis they find themselves in today just 5 years ago.
Sunday 10:55 am: How Will the Greek Elections Impact the U.S.? Here's a great (and possibly prothetic) primer from PolicyMic Pundit Lydia Austin:
Days after Spain received an underwhelming bailout package (see: failout), Spanish government bonds reached a yield of 7%, reflecting the downgrade of the Spanish government and sinking expectations in the euro zone. The bailout package failed to convince markets that the future of the euro zone is assured, and does little to alleviate the feeling of impending doom in the euro zone. The Spanish deal was essentially contingency-free, and recapitalized Spanish banks – as opposed to the Greek bailout package, which forced austerity measures on the country and facilitated a debt exchange with credit holders.
Some Greek politicians are using the outcome of the Spanish bailout package to take a tougher line in negotiations with the Eurogroup. Greek hard-lining is happening against a backdrop of upcoming government and parliamentary elections occurring Sunday. Austerity reforms will not work unless the citizens agree to implement and live by them – a diet that has been hard to swallow for the Greek people. The outcome of the election could be the turning point for the beginning of another global recession.
A stronger political union – what many agree is the best way for the euro zone to move forward – is politically unpopular among European citizens. This makes it difficult for European politicians to implement needed reforms, as they seek re-election in often-unstable parliamentary systems. Prime Minister Jean-Claude Juncker of Luxembourg, the chairman of euro zone finance ministers, explained, “We all know what needs to be done, but we don’t know how to get elected after that.” The result is paralyzed European governments that fight for the interests of their constituents rather than focus on the future of the euro.
Signs in Greece seem to point to the election of an anti-austerity party, such as Syriza. Capital flight is already occurring in Greece at a staggering rate – estimates put withdrawals between €600 million euros ($750 million) and €900 million per day. If Syriza is able to form a government, and rejects overtures from the European Central Bank to adopt pro-Europe reforms, Greece may very well leave the euro zone. In the worst-case scenario, with a Greek exit from the EU, money begins to leave European and American markets at a staggering rate. Strategists at Merrill Lynch have provided a cheat sheet of scenarios for the Greek election results; here’s what they have to say about a Grexit:
“The strategists see the 10-year Treasury yield at 1.3%, sliding U.S. and European stocks, the euro at 1.20 and deflationary pressures compressing gold and oil prices.”
This, of course, would spell trouble for incumbent Barack Obama. The economy is Issue #1 for most American voters, particularly middle- and lower-class workers who haven’t seen much relief during the recovery. President Obama has been making the case that he has, in fact, made things better, but is facing a tough audience. Recently, the campaign shifted tactics as the president focused instead on underlining how much worse the economy would be under a President Romney, and that he needs four more years to show people the results.
Will Americans give Obama another chance, particularly given the very real possibility that we are sliding into another global recession? It depends on how well the president can charm donors and voters who voted for him in 2008 but are now skeptical. With the latest polls showing Romney and Obama neck and neck, the battle for the white house (capitalize White House) will be drawn-out and difficult.
But there is only so much the incumbent president can do to control circumstances surrounding the election. European parliamentary elections could play a much bigger role in the global economy than ever before. Ultimately, the Greek elections this week will send a message to the world: one that will reverberate until November.
Sunday 10:34 am: According to The Miami Herald, Syriza, who's popularity has skyrocketed, says it wants to abolish "the cozy relationship that’s long existed between media owners and politicians, and to halt the practice of government payments to individual journalists."
Public support for Syriza has increased, in part, due to its promise to suspend the EU-imposed economic austerity measures that have led to a dramatic economic contraction here. However, Tspiras' party has also cleverly tapped into another source of public anger by denouncing the news media which -- according to a recent poll -- Greeks see as biased. A Syriza official alleged that thousands of reporters maintain conflicts of interest and that 500 to 600 journalists are or have been on the payroll of a government agency.
Sunday 10:22 am:
It all comes down to who the 7% to 10% undecided voters would break for. Though official polls are forbidden by law when election day nears, unofficial surveys place the two front runner parties -- Syriza and New Democracy -- in a virtual tie. For pro-Austerity New Democracy, the silver lining lies in the fact that 8 out of 10 Greeks wishes to remain in the EU. For anti-Austerity Syriza, the advantage is in the public perception of New Democracy, and its leader Antonis Samaras, as corrupt and unable to lead.
Sunday 10:14 am:
Three potential scenarios have been laid out in the event of "Grexit": a) the bank run, where people would take all their money from Greek banks pushing the country's financial system to the brink; b) the managed exit: where the government would announce the return to the (new) Drachma during a bank holiday in order to prevent the stampede; and, c) the transition: where Greece's new drachma would coexist with the euro for some time before becoming the country's new currency. It seems that, after all, the world won't come to an end (even if Syriza wins the majority).
Sunday 9:53 am:
The "European elites," represented by German Chancellor Angela Merkel's allies and media outlets such as Financial Times (FT), continue their fear-mongering campaign by calling Alexis Tspiras, the leader of Syriza, "a demagogue" and warning that the triumph of the "radical left" in Greece would be "the beginning of the end" for the country.
However, this strategy might galvanize Syriza's supporters instead as it is being perceived by Twitter users as a foreign intervention in the domestic political affairs of the birthplace of democracy.
Twitter is abuzz with the Greek elections as users around the world follow the incidences under the hashtags #Syriza and #KKE, among others, and "tweeps" showing sympathy for the anti-Austerity parties and candidates. "Today we will know if that who chooses is the Greek people or the Troika," says one tweet in Spanish; while another one, in English, encourages to vote for Syriza "to show the whole world's what democracy is all about. After all, Greece is the birthplace of democracy."
Sunday 9:29 am:
The first exit polls are expected at about 7:00 pm (noon EST). The party with the most votes automatically receives a 50-seat "top-up," which, however, may not be enough to secure a majority in the 300-seat parliament as the latest unofficial polls put New Democracy at 32% with Syriza as a very close second.
Sunday 9:12 am:
As new warnings of a run on the country's banks due to a potential "Grexit," front runners Alexis Tspiras (Syriza) and Antonis Samaras (New Democracy) cast their ballots on Sunday amid tense reports of homemade grenades thrown into a couple of polling stations.
In the meantime, activists in Germany have erected a wall of sandbags outside the Frankfurt Stock Exchange calling for a global tax on financial transactions as a way to relieve some of the tough austerity measures members of the euro zone have to endure.
Sunday 8:56 am:
Greek political analysts have described their country's choice as that between "the party of fear (New Democracy) and the party of despair (Syriza).” They say that "the despairing ones" (those that hope they can change something) will vote for Syriza, while middle class voters (those who still have something to lose, such as deposits, homes or jobs) will go for New Democracy. However, analysts agree that New Democracy “is very corrupt, weak and does not have the moral and the political gravitas to lead."
Sunday 8:34 am:
Former Prime Minister George Papandreou is following German Chancellor Angela Merkel's suit by warning that if voters reject austerity, the future will get "a lot worse" for them.
In the meantime, Reuters has reported that another hand grenade (which it did not explode) was thrown outside Greek TV station Skai by two men riding a motorbike.
Sunday 8:21 am:
As repoted by FT, voting in Greece is set to end in stalemate, with world leaders looking for signs that the country’s political parties will be able to form a government capable of implementing austerity measures agreed under its €174 billion bailout deal, and private opinion polls showed that none of the parties would win a parliamentary majority. The centre-right New Democracy party had a three-point lead over the radical left Syriza coalition, but neither party would capture even 30% per cent of the vote.