Greek PM paves way for second term by calling for new elections

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Greek Prime Minister Kyriakos Mitsotakis on Monday called for new elections on June 25, which will introduce a new electoral system that should give him the majority he needs to rule alone – a prospect welcomed by markets.

Mitsotakis’ New Democracy party won 40.8% of the vote on Sunday, double the score obtained by the hard-left Syriza party, but it finished with four seats out of the 150 needed for a parliamentary majority. Under the new electoral system beginning in June, the first party will be rewarded with up to 50 bonus seats, allowing Mitsotakis to form a government on his own.

“I believe there are no conditions for forming a government by the current parliament,” Mitsotakis said during the June 25 ballot call.

Mitsotakis has repeatedly said he wants to avoid a coalition and hold out for a majority government and markets have hailed the results, with the Athens stock market hitting its highest level in nearly a decade.

Greek bonds also rallied on Monday, with the prospect of a second term likely leading to an improvement in the country’s credit rating. from junk to investment grade. “Based on the results of the first round, this significantly increases the chances of another ND government, which would suggest continuity in fiscal and economic policies, positive credit,” said Moody’s senior vice president Steffen Dyck. .

According to the Greek constitution, as soon as Mitsotakis declares that he cannot form a coalition, the next parties in line have three days to try to form a government. It is expected that Syriza and the third largest party, the centre-left Pasok, will be unable to do so. Once all options fail, an interim government is appointed and new elections are called.

If he wins a second term, Mitsotakis is expected to pursue economic reforms with a pro-business attitude and accelerate the absorption of post-pandemic recovery funds from the EU. “He speaks the language of the investment community and an outcome that provides an ND majority government would be widely welcomed,” said Mujtaba Rahman, head of Eurasia Group’s Europe practice. However, “there are concerns about the rule of law under his leadership,” he added.

The prime minister was embroiled in a spyware scandal in which Greece’s intelligence services, overseen by Mitsotakis’ chief of staff and nephew, spied on politicians and journalists. The government has also been accused of a decline in media pluralism while Mitsotakis has been criticized by human rights groups for illegally turning back refugees at the country’s borders – although his tough stance on migration is widely supported in Greece.

Last week, the New York Times published a video showing border guards picking up migrants who had already landed on the Greek island of Lesbos and putting them on rafts at sea before letting them drift to Turkish shores. The newspaper identified the migrants and interviewed them in Türkiye.

The European Commission has sent an official request to the Greek authorities asking for this incident to be fully and independently investigated. Pushing back asylum seekers before they have had the chance to have their claim registered and analyzed is illegal under EU law.

“It is necessary that an appropriate follow-up is carried out by the Greek authorities,” EU Home Affairs Commissioner Ylva Johansson said on Monday. “The European Commission stands ready to take formal action, if necessary,” she added.