© Reuters. Greek Prime Minister and leader of the conservative New Democracy party Kyriakos Mitsotakis speaks outside the party headquarters, after the general elections, in Athens, Greece, May 21, 2023. REUTERS/Louisa Fradi
Written by Angeliki Cotanto and Carolina Tagaris
ATHENS (Reuters) – Greek Prime Minister Kyriakos Mitsotakis refused to seek a coalition on Monday after an inconclusive weekend election, setting the stage for a second vote in June that he hopes his conservative party will win outright.
New Democracy won 40.8% of the vote to 20.1% for the Syrian left-wing Syriza, in a stunning boost for Mitsotakis, who has had to navigate a wiretapping scandal, the COVID pandemic, a cost-of-living crisis and a deadly rail collapse that enraged the public. .
But it fell short of the number of seats needed to govern on its own, prompting a round of coalition talks between the three largest parties.
However, markets jumped on the prospect of New Democracy winning the second vote.
It would take place under a system of semi-proportional representation, with a tiered seat bonus, increasing the chances of Mitsotakis’ party winning outright. All parties are eligible to run again.
“Mitsotakis has no incentive to seek a coalition government… as the extra seats allocated in the second election make New Democracy’s victory almost certain,” said Lorenzo Kodogno, president of LC Macro Advisors.
While each party, including the PS PASOK, is set to receive a three-day mandate to try to form a coalition, no party has enough seats to form a governing coalition, and all party leaders have indicated they will not hold exploratory talks.
This would pave the way for the appointment of a transitional government to take the country to a new vote as early as June 25.
Stock jumped
“I think the country needs a strong and stable government today, with the possibility of a four-year term,” Mitsotakis told President Katrina Sakellaropoulou after she was formally offered the chance to form a coalition.
“The sooner this case is closed, the better for the country,” he said.
Mitsotakis’ office said that Mitsotakis made a phone call to the leaders of the four other parties that entered parliament, stressing that it is not possible to form a government under the current circumstances.
Former prime minister and Syriza party leader Alexis Tsipras is due to meet the president on Tuesday.
Greek stocks jumped on Monday and banks outperformed, rising nearly 15%.
Greek bond prices also outperformed their peers on Monday, as investors thought the election outcome was unlikely to lead to a deviation from the current fiscal discipline.
Syriza and PASOK have indicated that they will now turn their focus to the upcoming elections.
“There is no room for rapprochement or cooperation,” PASOK spokesman Dimitris Mantzos told state broadcaster ERT.
In a televised statement, Tsipras called on voters to “prevent the prospect of an uncontrollable ruling prime minister”, in the upcoming election battle.
Once each party has returned or exhausted its three-day mandate to try to form a coalition, the president can then appoint a caretaker government, which is expected to be sworn in by early next week, leading to a new election date.