A Pyrrhic victory for New Democracy?
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Published 19 April 2023
In the wake of several government scandals, not least the Tempi train disaster, Greek governing party New Democracy are struggling to gain momentum in the run-up to the May elections. Analyst consensus is, if this election fails to produce an ND government, the party will call another election which will be fought under a more favourable electoral law. This note explores the current state of play, its likely implications, and how a new electoral law will affect the balance of power.
Key Takeaways
Governing party New Democracy are likely to win the election but lose their parliamentary majority. In the aftermath of the Tempi train disaster, the gap between the two has narrowed. Post-election government formation will be very complicated.
Even with the possibility of a second election, a stable majority government is far from certain. Societally, Greek political trust is likely to suffer. Financially, this will also complicate meeting Recovery Fund timelines.
New Democracy’s lifeline is the possibility of a second election under more favourable rules. We show the effects of new electoral rules on the balance of power in the Greek parliament.
What is the state of the race?
For a long time, the May parliamentary elections appeared to be a walk in the park for the centre-right incumbent party New Democracy (ND). The party’s polling lead over their main left-wing rivals Syriza was comfortable, ranging from 15 to 25 percentage points. However, in the wake of two scandals, their lead has now almost evaporated. Last July, the government was forced to admit to the secret service wiretapping of PASOK opposition leader Nikos Androulakis as well as several journalists. More recently, ND also faced backlash over the Tempi train crash, with opposition leaders blaming government inaction on Greek infrastructure policy.
Figure 1: Trend lines of Greek polling averages by political party
As Figure 1 illustrates, the polling gap between ND and Syriza is currently approximately 5 percentage points. Given these trend lines, it is likely that a significant number of ND voters have (possibly temporarily) abandoned their party. Meanwhile, a range of minor parties have increased their estimated vote shares in the aftermath of the train disaster, drawing support specifically from disillusioned ND voters and voters looking for an alternative to ‘politics-as-usual’. These parties include communist KKE, nationalist Greek Solution (EL), Yanis Varoufakis’ radical left MeRA25, and far-right Hellenes (EP).
What does that mean for the Greek balance of power? Translating these vote shares to seats is not straightforward. The Greek electoral system is relatively proportional but does contain a mix of 59 single-member and multi-member constituencies as well as an electoral threshold at 3%. Additionally, there is the open question of whether or not Hellenes will be able to run in the elections. Since the Tempi train disaster, the far-right party has frequently polled above the 3% threshold, but the government recently passed a law to ban it from participation in the elections due to its links with violent extremism.
Figure 2 : Seat projection based on current polling averages
Assuming the Supreme Court does not strike down this law in its upcoming May 5th ruling, Figure 2 illustrates how many seats each party (excl. Hellenes) would get under current polling averages. With just 115 seats, New Democracy are projected to fall well short of a parliamentary majority. Main opposition party Syriza are estimated to win 97 seats, and third party PASOK gets 37 seats. Based on these figures, New Democracy’s best option would be a coalition government with PASOK. However, after the wiretapping scandal, relations between both party leaders are abysmal, making this an unlikely prospect.
Should New Democracy fail to form a government, two options remain. In the first instance, second-largest party Syriza would be allowed to attempt to form a government. In this case, Syriza would need to tempt PASOK and one of KKE and MeRA25 into joint government. Although this is an unlikely prospect, it is not impossible. Should this fail too, the President of Greece will appoint a caretaker government and new elections will be held in July. As mentioned above, these elections will be contested under a new set of electoral rules that provide a considerable amount of bonus seats to the largest party. If New Democracy win the May elections but fall short of an absolute majority, it is likely that they will push for new elections in the hope of expanding their lead with the bonus seats. The implications of calling new elections are outlined in section three.
Why do these elections matter?
The elections and subsequent government formation processes will have profound implications for Greece. Firstly, since the global financial crisis, levels of political and institutional trust in Greek society have been low. The 2022 Eurobarometer survey found that just 22% of Greeks trust their government. Recently, the Tempi train disaster sparked further political anger in what was already a fragile situation. If the upcoming elections fail to yield a stable government or lead to prolonged political stalemate, this is likely to further widen the gap between Greeks and their government.
Similarly, extended government instability would affect Greece’s financial situation. The country is in the midst of meeting a series of deadlines that are key to unlocking EU Recovery Fund money. This funding is linked to a timeline of investments and reforms, focusing specifically on Greece’s green and digital transition. Should the government miss deadlines and the EU Commission reject Greek requests for disbursing the funding, this would deal a significant blow to Greece’s fiscal plans.
In that regard, a stable government majority would make meeting these deadlines significantly easier. The third section of this newsletter will provide more detail on whether new electoral rules could help facilitate this majority. However, even with elections under these new rules, a single-party majority government is not guaranteed. Moreover, it is important to note that government change, e.g. an unexpected Syriza victory, could also complicate this process. A left-wing government under Syriza is likely to disagree with the substance of the reforms proposed and attempt to renegotiate.
Contrary to popular belief, a second election with new rules may also fail to secure New Democracy a government majority
Greece’s electoral rules have changed substantially over time. Over and over, different governments passed new electoral laws to make the system either more proportional or less proportional. This is illustrated in Figure 3, using the Gallagher Index. This index is a measure of the degree to which party seat shares correspond to party vote shares. A perfectly proportional system would have a Gallagher score of 0 and see a party with 40% of the nationwide vote also receive 40% of seats in parliament.
Figure 3: Proportionality (Gallagher score) of the Greek electoral system over time
From an electoral reform perspective, the May elections are fascinating. Due to constitutional arrangements, Greek electoral reforms only enter into force in the second election after they are passed. As a result, the May elections will be contested under very proportional rules, similar to the system in place in 1990 (see Figure 3). These were passed by the previous Syriza government. However, in the current government term, New Democracy passed a law to change the electoral rules and revert back to a much less proportional system. This law will enter into force the first election after the May elections, leading many analysts to believe that it is in New Democracy’s interest to push for new elections soon after the May elections.
To what extent does current polling evidence support this view? It is certainly true that, assuming polling averages would remain constant, the new set of electoral rules would substantially increase New Democracy’s seat share. Figure 4 illustrates party seat shares based on current polling under proportional rules (the system in place for the May elections) and under the majority bonus system in place for the election after the May elections. With the same vote share, this system would give New Democracy an additional 27 seats. Meanwhile, all other parties would lose seats, with Syriza’s loss of 12 seats being most significant.
Figure 4: Comparison of seat shares given current polling averages (pre-election [left] versus hypothetical post-election [right])
However, this is insufficient for a parliamentary majority: 151 seats are needed for a majority in the Greek parliament. As Figure 4 illustrates, New Democracy would only reach 142 seats, even with the added winner’s bonus of the new electoral law. In other words, the less proportional rules do not solve all of the incumbents’ problems. If they do not manage to increase their vote share, they may still have to enter into a coalition government after possible second elections. Given their unpopularity among members of the current opposition, this may prove to be an arduous task.
As mentioned above, this outcome would have serious implications. Given recent polling trends, it appears that New Democracy’s polling vote share is more likely to drop than to rise. Without a single-party parliamentary majority, we are very likely to see the formation of a relatively unstable coalition government. Such a government, prone to further political infighting and stalemate, would be unlikely to make progress in restoring political trust. Moreover, as mentioned, Greece would benefit from stability when it comes to meeting Recovery Fund timetables. Without a clear single-party majority, Greece’s fiscal prospects would become a lot more uncertain.
