Mitsotakis victory to shore up EU southeast flank

Greece’s new center-right administration could turn a European basket case into a point of strength

On Sunday, July 7, Kyriakos Mitsotakis led his conservative Nea Demokratia (New Democracy) party to a convincing win in the Greek parliamentary elections, gaining 158 out of 300 seats.

The following day, the yield on the Greek 10-year government bond at one point touched 2.01%, the lowest since Greece joined the Eurozone on January 1, 2001, and slightly lower than that of the 10-year US Treasury note.

The bond market, considered the savviest of financial markets, had delivered a resounding vote of confidence in the new Greek prime minister. It was also the result of an overall comeback from the European debt crisis which plagued the Greek economy for much of the past decade.

Will Mitsotakis be able to justify such advance accolades and make good on his electoral promise of “less state, fewer taxes and more investments”?

A Harvard graduate (BA, MBA), ex-banker (Chase, London; Alpha Bank; National Bank of Greece), and former minister of administrative reform, he is Greek political royalty. His father, Konstantinos, was prime minister 1990-93, and Kyriakos was first elected to parliament a decade later. In January 2016, he became president of Nea Demokratia, the party cofounded by his father, which he led to victory earlier this month.

Nearly 50% of the popular vote went to left-wing parties, with former ruling party Syriza taking the lion’s share. Four years of misrule by the Syriza coalition and its leader Alexis Tsipras notwithstanding, the political left has survived the election. This leaves the door open for Syriza to slow down any reform drive of the new administration by launching an anti-austerity front, laced with nationalist rhetoric if need be.

The irony is that Syriza, after his election on a far-left platform four years ago, actually caved in to European Union austerity demands. Tsipras swiveled 180 degrees from his radical election rhetoric, inking a controversial bailout deal that saw Greece accept austerity through 2060 and surrender control of its public assets for the next century.

The cost has been huge, with major cuts to education, healthcare and pensions. And the deal split Syriza, according to George Souvlis of the European University Institute. “The party was dissolved: half left, and what remained was an empty shell.”

With the radical left having abandoned its principles in favor of a neoliberal bailout, Greece was ripe for change.

 
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