When former Greek Prime MinisterAlexis Tsipras remained in power in September 2015, following his clash with international creditors, he stated that the country now wanted a stable government, after five elections in six years, according to an article by the international news agency Bloomberg.
About a decade later, the new opposition party he founded last week reflects an increasingly fragmented political landscape, which could undermine Greece’s hard-won reputation among investors as a stable country, the article notes.
The emergence of new parties follows a broader trend across Europe, as electorates become more polarized around issues such as the cost of living, immigration, and housing.
In Greece, the policy was a key factor in the economic recovery that allowed the country to regain its status as a developed economy and record some of the fastest growth rates in the European Union, according to Bloomberg.
With elections expected by next June, the question is whether Prime Minister Kyriakos Mitsotakis can secure a third consecutive term, following his electoral victory over Tsipras in 2019.
Polls show that the rulingNew Democracy party maintains a comfortable lead, but they also suggest that Mitsotakis lacks the necessary support to continue governing without a coalition partner.
“If a stable government does not emerge and there is a short-lived government followed by new elections, then political instability will spill over into the economy,”said Vasilis Monastiriotis, professor of political economy at the London School of Economics and director of the Hellenic Observatory.
This would slow down private investment and possibly delay access to European funds, he added.“Both would have an impact on growth.”
The article notes that Greece, which dominated global headlines during the sovereign debt crisis, has achieved an impressive economic recovery over the past decade, having previously lost nearly a quarter of its GDP. However, despite the positive fiscal picture, many Greeks say they feel left behind.
At the same time, the opposition appears fragmented and is focused on how to challenge Mitsotakis. Tsipras’s new party, the Greek Left Alliance, seeks to unite voters against New Democracy.
Last week, Maria Karistianou, the mother of a victim of Greece’s deadliest train tragedy in 2023, also announced the creation of a new political party.
“Even before the emergence of the two new parties, we were already counting 12 parties in our polls,”notes George Arapoglou, general director of the polling firm Pulse.
This situation makes it harder to predict the election results and their consequences, he noted.“I can’t remember the last time there were so many parties in our polls.”
Alexis Tsipras’s former party, SYRIZA, overturned Greece’s post-dictatorship two-party system when it came to power in early 2015.
Greeks had grown accustomed to political turmoil, as successive prime ministers resigned or called early elections—including Tsipras himself—before and during the debt crisis.
Polls indicate that Tsipras and Karistianou will join an already crowded field vying for second place, alongside PASOK. This means they may play a decisive role in a potential governing coalition.
New Democracy is polling at levels close to its lowest since taking office.
It faces mounting pressure following the Tembi train tragedy three years ago and the European Public Prosecutor’s Office’s ongoing investigations into alleged fraud related to agricultural subsidies, Bloomberg reports.
Mitsotakis has also stated that the only way to secure the country’s future is through a strong, self-reliant government. This is no longer considered a certainty, according to Arapoglou.
In Greece, there is also no culture of coalition governments. The only long-term coalition governments in modern history were formed during the debt crisis.
The electoral system provides for a seat bonus for the leading party, in order to favor single-party governments. This increases the likelihood of multiple elections , should no party be able to form a government next year.
However, Mitsotakis has proven that he can defy the odds. In 2023, New Democracy exceeded expectations and was re-elected following the train tragedy. Pre-election polls indicated that it would be unable to form a majority government.
For now, the prime minister is focusing on Greece’s economic indicators and improving fiscal figures.
Last month , he announced support measures totaling approximately €500 million, following the projection of a budget surplus for 2025. These include family allowances, assistance for renters, and an extension of subsidies for diesel fuel and fertilizers.
“The country is showing sound fiscal results, and I do not believe that the fiscal trajectory will be significantly affected by a transition to a coalition government,”according to Monastiriotis of the LSE.
However, if a government is not formed and the country heads toward a second election,“political instability will have an impact on fiscal balance.”