Greece’s New Democracy sets high goals in its second term
The party has its work cut out raising investments, growth and wages, and lowering debt and unemployment
Jubilant fans clamoured around New Democracy’s headquarters, floodlit in the party’s trademark blue on Sunday night, to celebrate prime minister-elect Kyriakos Mitsotakis’ return to a second term.
“For the second time, all of Greece is blue,” Mitsotakis said, referring to the electoral map, which showed only one of 60 electoral districts in the opposition Syriza party’s red.
“The Greek people trusted us for a second time with a comfortable majority, just as we asked. It gave us a powerful mandate,” he said.
“You are and you will be the prime minister,” people chanted back.
Mitsotakis won 40.5 percent of the popular vote, giving him 158 seats in the 300-seat parliament. The opposition Syriza trailed with 17.8 percent, and may now go through a leadership challenge.
The result came as no surprise. Mitsotakis had won a similar victory five weeks earlier, but couldn’t form a government under the system of proportional representation in force at the time, which gave him only 145 seats.
He held out for a second election, which triggered a new electoral system called enhanced proportionality. It gives the top party a bonus of up to 50 seats, making governments easier to form.
Mitsotakis came to power in 2019, promising to cut taxes imposed during Greece’s economic depression, following the 2009 global financial crisis.
Mitsotakis did cut business and payroll taxes, but his first term was consumed by a series of crises – the Covid-19 pandemic, a crisis with Turkey and the Ukraine war, which brought energy inflation.
These crises also convinced Greeks that Mitsotakis is a competent manager capable of handling difficult situations, and that he deserves another chance to implement his economic reform programme. His support has been especially strong among small businesses and the self-employed, who together provide 90 percent of private sector employment.
“I am not an economist, but the economy is mainly a matter of trust. People who are in the marketplace need to be able to trust the government. That only happens with New Democracy,” said Chronis Akritidis, a self-employed topographer and New Democracy supporter.
“Mitsotakis has won a very big gambit – to do what he says and to convince people to trust him. That is very difficult to do.”
“Greece has a deep state that is difficult to fix, but at least [New Democracy] tries to get some things done,” said Yiorgos Stanotas, a plastics factory owner. “The things I appreciated most were e-government, and the fact that they got pensions out to people quickly,”
Mitsotakis vowed on Sunday “to close once and for all the vicious cycle of division and toxicity that started a decade ago.”
He has a promising start. Greece achieved the highest growth rate in the EU last year – 5.5 percent – and is set to top the growth leagues again this year with 3.5%, but critics say that was largely achieved by over-reliance on tourism and real estate sales.
New Democracy has made ambitious promises for its next term. It would raise public investment by 70%, attract record foreign direct investment, boost exports to 60% of GDP and raise average wages by 30 percent. It hopes to maintain the average annual growth rate above 3%.
Adding fuel to this emphasis on growth is the soaring energy inflation that hit Greece along with the rest of Europe last year.
“The issue is not just to give someone a raise. It’s also about having quality of life, otherwise what’s the point?” said Athanasios Tsoukalas, a pensioner who supported neither New Democracy nor Syriza.
“If someone gives you a raise and takes it back tenfold, that’s not a raise. That’s a bait and switch,” he said.
Greece suffered a 7.2 percent inflation rate last year, lower than the EU average of 9.2 percent, but it also has one of the lowest per capita rates of GDP in the EU.
Greece’s debt is another enormous economic challenge, and Mitsotakis added to it when he gave away 66bn euros in tax breaks and subsidies, helping people weather the Covid pandemic and energy inflation. It now stands at 400bn euros, almost twice GDP.
“Because [New Democracy] has got 40% it feels it has the right to do anything,” said Athanasios Drivas, a Syriza party functionary. “I don’t know if people realise that all this money dropping from the ceiling is borrowed and paid for with high interest. I don’t know if they realise that at some point our friends and partners are going to tell us that the party is over.”
New Democracy has vowed to bring it to 160% of GDP by the end of its term, and to 120% by the end of the decade.
Some non-supporters of New Democracy, and even some supporters, are worried that the party has become too powerful.
Voters leaving Syriza seem to have scattered in all directions, but most notably to a series of smaller parties, many of them entering parliament for the first time.
The Spartans and Niki are both anti-systemic, nationalist parties to the right of New Democracy, now crowding the same part of the ideological spectrum as Greek Solution. Also entering parliament for the first time is Sailing to Freedom, a left-wing anti-systemic party. Together, the four of them claimed 16 percent of the vote and fielded 42 MPs.
The fact that they didn’t heed New Democracy’s call but went instead to alternative right-wing parties was not lost on Mitsotakis.
“This political dominance is not a recipe for arrogance or a blank cheque,” warned Mitsotakis outside party headquarters on election night.
“People have a lot of problems, and they demand that we lean into the task of solving these problems. Today I am the prime minister of all Greeks, and I am expressing the expectations of all those who didn’t support us… I am sure we shall once again vindicate people’s expectations with our second term.”