Greece cannot afford election concerns

 The inertia and inaction which are evident in the public sector should not become the economic norm

By Dimitris Kontogiannis

A period of political uncertainty is bound to have a negative impact on economic activity but cannot be ruled out if the outcome of the elections for the European Parliament yesterday is seen by markets to create the conditions for snap general elections in early July or in the fall. The signs of the “traditional” slowdown before important elections are already evident in the public sector and may spread elsewhere as important decisions are put off. Snap elections or not, the last thing Greece needs now is a protracted period of inaction on economic matters.

When we were writing this article we did not know yesterday’s European Parliament and local elections outcome. Various recent opinion polls showed the leftist SYRIZA party was leading conservative New Democracy by a margin of 1 to 4.3 percentage points with a relatively large chunk of undecided voters heading into Sunday. According to analysts with access to polling data from different companies, little has changed since last week. This means the result of the first round of local elections, largely favoring the two ruling coalition parties except for the Attica region, had not had a noticeable impact on people’s vote preferences for the European Union ballot.

The analysis continued to give SYRIZA a clear lead over the conservatives while the far-rightist Golden Dawn party was firmly in third place, doing better than projected in the press. In addition, it indicated the conservatives had failed to pass the message to the general public that the country faced the prospect of snap elections if the outcome was not good for them. In general, analysts and high-profile...