The benchmark Athens Stock Exchange General Index jumped to its highest level in almost a decade while the yield on Greece’s 10-year bonds dropped by 14 basis points to 3.877 per cent. That was the lowest since December and underlined the disconnect between Greece and Italy, another weak spot in during the euro crisis of the previous decade.
Sunday’s election was the first and only one to be held under the system that Tsipras introduced that effectively meant that a candidate needed around 48 per cent of the vote to form a majority.
A second ballot — and future Greek elections — will award a bonus of as many as 50 seats to the winner, lowering the threshold for a majority to about 38 per cent under certain conditions.
The prospect of Mitsotakis claiming a strong mandate for his second term sets Greece apart from most of its neighbours, who’ve seen allegiances fragment during a decade that’s included a financial crisis, a pandemic and the return of war in Europe.
Spanish Prime Minister Pedro Sanchez leads a minority coalition dependent on ad hoc alliances to pass legislation. Prime Minister Giorgia Meloni needed a three-party coalition to claim power in Italy after emerging from the political fringes. Even in Germany, where coalition building is part of the political fabric, Chancellor Olaf Scholz is leading the first three-party government in more than half a century.
France’s presidential electoral system makes President Emmanuel Macron something of an outlier among Europe’s biggest economies, although even he lost his parliamentary majority at the start of his second term.
“New Democracy is the largest centre-right party in Europe,” Mitsotakis said after his victory.
Voters were particularly focused on Greece’s economic transformation, which has seen gross domestic product recover to just about where it was when the country lost the ability to repay its debt in 2010. Unemployment has more than halved from its peak of 28 per cent and stocks and bonds have soared.
The election shows that many people just want that to continue.
They want a government that can stick to the sustainable fiscal path Greece had followed before the pandemic and keep taking full advantage of European Union funds that are helping to boost growth.
And that means a majority for Mitsotakis.