News Analysis: No honeymoon for new Greek gov't vowing to break "triangle of stagnation"

Source: Xinhua| 2019-07-08 19:45:22|Editor: xuxin
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ATHENS, July 8 (Xinhua) -- Greece's conservative New Democracy (ND) party made a strong comeback on Sunday with a landslide victory in the general elections. But political commentators here believe it will not enjoy a honeymoon, as the challenges facing the debt-ridden country in the post-bailout era require swift and decisive steps.

ND leader Kyriakos Mitsotakis was sworn in as new prime minister on Monday and his cabinet will follow on Tuesday.

According to final official results released by the Interior Ministry, the ND won some 40 percent of votes and 158 seats in the 300-member parliament.

It will be the first time since 2009 that Greece will be ruled by a single party which holds a comfortable majority in parliament.

During the decade-long crisis, the country suffered from political instability linked to a fragmented political landscape where anti-austerity populist rhetoric prevailed.

Four years after SYRIZA, the Coalition of the Radical Left of Alexis Tsipras took over, initially promising to tear up the bailout agreements with lenders before making a U-turn and implementing the same tough policies that led Greece back to growth and out of the bailout era last August, Greek voters turned their back on SYRIZA.

They opted for a moderate liberal conservative party which pledges strong development, fewer taxes, more jobs and bold structural reforms. Mitsotakis is a scion of a political dynasty leading a party which had ruled Greece for many years before the debt crisis and which had been criticized for grave mistakes that left the country at the brink of default.

Mitsotakis took over ND's helm in 2015 and modernized the party and analysts here expect him to be able to do the same with the country.

"Europe is moving into the post-populism era. Mitsotakis was one of the first in his party who resisted populism. He understands that the creation of fiscal space in coordination with our partners will come through reforms which will support production and make the economy more attractive to private investments," noted George Pagoulatos, professor of European politics and economy at the Athens University of Economics and Business, in an article in the Kathimerini (Daily) newspaper.

"Despite SYRIZA's showering voters with old-fashioned, last-minute, clientelistic handouts, voters demanded political change. Greece has been through a lot. The country is not in need of celebrations, but a period of hard work," Mitsotakis said in a recent emailed ND press statement outlining his government's program.

"We want to attract 100 billion euros (112.3 billion U.S. dollars) of investment over the next 5-10 years, double Greece's growth rate to 4 percent and achieve investment-grade status within 18 months. To do that, we need to break the vicious circle of what we call the 'triangle of stagnation'. Greece needs a three-pronged attack with respect to reforms, fiscal policy, and the banks. At the heart of the triangle lies sound governance," he explained.

The new Greek prime minister pledges to accelerate reforms and end over-taxation which has strangled the middle class. He plans to reach out to Greece's lenders to renegotiate the post-2020 fiscal targets, using the vast majority of that to lower taxes further.

"Change will come fast. We have no time to waste," he has repeatedly stressed.

"Mitsotakis knows that a lot will depend on the economy. The road ahead is not rosy and the first 100 days in office will be a difficult test," Greek news portal commented on Monday.

Eurozone ministers Alreadymeet on Monday to discuss how Greece faces the risk of missing its budget targets after SYRIZA's spending spree in recent months. In addition to a fiscal gap, there is delay in dozens of structural reforms.

There is much to be done to achieve full economic recovery, the article noted. Banks are still burdened with non performing loans, public debt still exceeds 180 percent of GDP, growth rates are yet slower than expected, unemployment still high at 18 percent, red tape and an underperforming public sector are still present, tax evasion rampant and Greek society is exhausted after a decade of austerity.

Despite progress steps made in recent years, there are still complex problems to be addressed and several of them led to the debt crisis in the first place.

"Mitsotakis was given an opportunity to make a difference and change Greece," commented the Liberal newspaper, adding that dangers are lurking.

One of the key challenges for the new modernizer is to face down vested interests and pressures from within his own party which are not fond of changing the old mentality or practices. In combination with reactions from society to unpopular reforms, his efforts could be undermined and derailed, as has happened to previous administrations. (1 euro = 1.12 U.S. dollars)