THE CRISIS scenarios prepared by various countries within the eurozone in the event that parliamentary elections in Greece were won by parties opposed to the criteria of the bailout plan negotiated by the European Union, the International Monetary Fund and the European Central Bank may not be needed. Greece’s New Democracy party, which has backed the bailout plan and its associated national austerity measures, received 29.66 percent of the vote in the June 17 election and will hold 129 of the 300 seats in the Greek parliament, the TASR newswire reported.
The second highest number of votes, 26.89 percent, went to the Syriza party that has been critical of the conditions attached to the international financial assistance, followed by the Panhellenic Socialist Movement (Pasok) that captured 12.62 percent of the votes, the Independent Greeks party (ANEL) with 7.5 percent, the Democratic Left (DIMAR) party with 6 percent, and the Communist Party (KKE) with 4.5 percent, TASR wrote.
TASR wrote that it is likely that a new government can be formed by a coalition of New Democracy, Pasok and DIMAR, the three parties which have said they are prepared to continue austerity measures to lower Greece’s extremely high public debt.
Prime Minister Robert Fico welcomed the election results, saying he considered the decision by Greek voters as proof that “they are aware of the significance of European integration and the euro as a common European currency”, TASR wrote on June 18.
“The election is just the first step, though,” Fico added, as quoted by TASR. “Only the weeks to come will show what will follow for the eurozone from the political and election decision. A government needs to be forged quickly in Greece, one that will launch intensive talks with the European Commission. All this might take a relatively long period of time.”
Finance Minister Peter Kažímir reacted to the Greek elections with a statement that “Europe needed a success” and that “the majority decision of Greeks to continue in changing their country and remaining a member of the eurozone” was such a success, the SITA newswire reported.
Mikuláš Dzurinda, the previous foreign affairs minister who is now an MP from the Slovak Democratic and Christian Union (SDKÚ), said that the victory of New Democracy and the high vote count for Pasok are good news not only for Europe and the eurozone but also for the broader geo-political space. Nevertheless he stressed that “Greece will need two electoral terms full of hard work before it can stand on its own feet”, the Sme daily reported quoting Dzurinda.
But some Slovak politicians did not see the result of the election so positively. While Július Brocka, an MP for the Christian Democratic Movement (KDH), praised the results of the elections he added that “it is appropriate for Greece to be asked to leave the eurozone”.
“There is a risk that the debt crisis will spread to Italy or Spain,” he told the Sme daily. “It is like a disease; if you are infected you need to be isolated to stop the virus from spreading.”
Jozef Kollár from Freedom and Solidarity (SaS) party went further in his statements and said that the majority of politicians in Europe have overestimated the results of the Greek elections.
“Each of the relevant political parties claimed during the election campaign that it will support restarting negotiations and changing the conditions for the financial help to the country,” Kollár stated, as quoted by Sme. “Greece and Spain are only at the top of the iceberg and it is high time for the eurozone to start solving its problems systematically.”
Slovakia’s worst-case scenario
Like other countries, Slovakia prepared a worst-case scenario if the Greek elections were not won by a party that would seek to stay in the eurozone.
If the European sovereign debt crisis intensifies in peripheral countries of the eurozone and some country would be forced to leave the monetary union, Slovakia’s GDP could fall by about 3.9 percent, according to a prognosis presented by the Finance Ministry’s Financial Policy Institute on June 15.
The prognosis also stated that Slovakia’s unemployment rate could exceed 15 percent and the average nominal monthly wage could fall by about 3 percent, Sme reported.
The crisis scenario also foresaw an overall economic depression in the eurozone and a 3.5-percent drop in the eurozone’s GDP between July 2012 and the end of 2013 along with a prediction that the euro would fall in value against the US $ to an exchange rate of 1.1, also weakening currencies of EU countries that are not members of the eurozone.
“These are depressing, sad scenarios that I hope will never happen,” Kažimír stated, as quoted by Sme.
The Finance Ministry announced that if Greece left the eurozone and did not pay off the loan it has received from the international institutions Slovakia’s national debt could increase by an additional €723 million in 2012-2013.
After the results of the election were reported finance ministers from eurozone countries announced they will continue to help Greece in overcoming its debt crisis and restoring economic growth while emphasising that they believe the best way to resolve the current problems is to continue in the path of structural and fiscal reforms, SITA wrote.
21. Jun 2012 at 0:00 | Compiled by Radka Minarechová