Greeks Don’t Want a Grexit
The pundits say that Greece will have to drop the euro after Sunday's election. But that's not what the Greek people want.
Global markets are on pins and needles awaiting the results of this Sunday’s parliamentary election in Greece. The problem is that no one seems to know which party will win, breeding further anxiety. One of the biggest fears is that an "anti-memorandum" coalition will emerge that rejects the bailout terms currently in place between Greece and the "troika" of the European Commission, European Central Bank, and International Monetary Fund. If this happens, a chorus of analysts say, Greece could be forced to exit the eurozone, threatening the future of the continental currency.
But all this uncertainty overlooks what we do know about how Greeks will vote and what the next coalition government is likely to do regardless of which party emerges victorious on Sunday. Numerous surveys of Greek voters taken during the past month have revealed what the near future likely holds, meaning there are more certainties than commentators let on.
For starters, two parties are clearly out in front: the right-wing New Democracy and left-wing SYRIZA. One of these two parties will win this Sunday, earning a 50-seat bonus in the legislature. However, neither party will secure the approximately 40 percent of the vote needed to form a post-bonus majority government on its own. Therefore, any new government that is formed after the June 17 election will be a coalition government, meaning it will be hypersensitive to mainstream public sentiments.
And what are those sentiments? Most Greeks are worried that no one is at the helm of the Greek ship. For them, priority No. 1 is to ensure that the election produces a viable government wherein the political parties cooperate to avoid a "Grexit" from the euro. Unless the next government of Greece is foolish enough to defy the solid preferences of its electorate, we can be fairly confident it will take the necessary steps to implement the two-fold mandate of the people: relax the austerity measures and stick with the common currency.
According to a recent survey by the polling company MARC, only 9 percent of the Greek public wants the next government to continue implementing the harsh terms of the bailout memorandum agreed to in February. That does not, however, mean that Greeks oppose the troika’s conditional assistance. Two recent surveys found that only one in five Greeks wants to do away with the memorandum altogether. After two years of continuing hardship in a contracting economy, most Greeks instead want a new government that will pursue a modification of the current austerity measures. Renegotiation, not rejection, is the nuanced position of the Greek people. And that’s exactly the position the next government in turn will adopt, regardless of which party wins on Sunday.
The other clearly established preference is for Greece to stay in the eurozone and avoid a return to the drachma. Polls have consistently found that between 70 and 85 percent of the population wants to maintain the euro. A GPO poll even found that 81 percent of Greek voters surveyed in late May thought Greece should stick with the common currency "at all costs."
Keeping the euro is arguably the policy objective of greatest importance to the Greek people. The euro trumps all, including the memorandum. One survey found that, even if sticking with the euro would require "faithfully implementing" the existing harsh bailout terms, Greeks would accept the sacrifice. This is of course an extreme scenario, and most Greeks still seek a renegotiation of the agreement. But if push comes to shove, Greeks are willing to accept the pain of austerity if it ensures they can stay on the euro.
Sunday’s election, unlike the one last month, will not be about punishing the two mainstream parties — the center-right New Democracy (ND) and center-left Panhellenic Socialist Movement (PASOK) — which most Greeks blame for the current mess. As a recent poll by the Athens-based Metron Analysis found, only 15 percent of the Greek public plans to cast a ballot out of protest. This means that smaller parties will not fare as well as they did in the May 6 election.
Much, for instance, was made of the sudden rise of the Greek neo-Nazi party Golden Dawn (GD), which secured 7 percent of the vote in May and would have earned 21 seats in the 300-seat parliament had a government been formed. Polls are now consistently finding a drop in GD’s standing, indicating that while the party is still likely to earn a place in parliament, its strength will be cut significantly. The same holds for the other three small parties that passed the 3 percent threshold needed to acquire seats in the legislature in last month’s election: the Independent Greeks, the Communist Party of Greece, and the Democratic Left. With three of these four parties calling for an outright rejection of the memorandum, they are likely to see weaker showings on Sunday, which will in turn diminish their ability to sway any coalition government into renouncing the agreement outright.
Put all these factors together, and it’s hard to see how the next Greek government won’t pursue policies that avoid a "Grexit." Even if SYRIZA wins the election and is able to form an anti-memorandum coalition with some of the smaller parties — an unlikely but not impossible scenario — it will be difficult to reject the memorandum entirely and abandon the euro. True, SYRIZA, one of the two leading parties, has suggested that one of its first official acts might be to tear up the memorandum and withdraw Greece from the bailout agreement. It has also pledged to implement a series of unilateral spendthrift policies to relieve some of the pain caused by austerity measures. Nevertheless, with the current caretaker government warning that Greece is likely to face a 1.7 billion euro shortfall in less than a month, it’s hard to imagine how a SYRIZA-led coalition could fully reject the memorandum, find the funds necessary to keep its promise of raising salaries and pension payouts, and stay in power without returning to the troika begging for a return to the good old days of the memorandum. In other words, even a victory by the rhetorically populist and prodigal SYRIZA on Sunday does not point to reckless behavior that defies the wishes of the Greek public.
Greece might become the first eurozone domino to fall, crashing thunderously on the continent. But if it does, it won’t be because that’s what the Greek people want.