Hardship awaits Greek election winner

ATHENS - Sunday is a big day for Greece. Nearly 10 million voters will make their choices in a new parliamentary election, after which the winner will most likely be immersed in tense talks to form a coalition government and then to ask for softer bailout terms for its country.

Whoever comes out first, either the conservative New Democracy party or the leftist Syriza party, can hardly win a majority to avoid a coalition. Neither can it avoid tough negotiations with European leaders to keep Greece in the euro zone, observers say.

New democracy or Syriza

The conservative New Democracy party and the leftist Syriza party are expected to run neck-and-neck in Sunday's election, according to the latest surveys. Both frontrunners have made it clear that they want Greece to stay in the euro zone.

Neither won enough support to form a government in the May 6 election, when New Democracy and the Socialist PASOK party were punished by voters for backing the bailout program tied with austerity measures, while Syriza came second on an anti-bailout pledge.

Aggelos Tsakanikas, an expert with the Greek Foundation for Economic and Industrial Research, predicts a narrow lead by New Democracy in Sunday's election, which will form a pro-bailout government.

New Democracy leader Antonis Samaras has consistently backed Greece's bailout agreement while pledging to further negotiate with European leaders over the austerity terms seen by many as exacerbating Greece's recession.

Syriza's leader Alexis Tsipras, on the other hand, had earlier vowed to tear up the bailout agreement and then pledged to keep Greece in the euro zone while still rejecting austerity measures.

Critics say Tsipras offered false hope to win voters' support and that he would revise it if elected, as Greece may default and be forced out of the euro zone if austerity measures are rejected and international rescue loans are no longer provided.

Hard talks with the EU

Amid fears of a possible euro exit, Greece's new government, either pro- or anti-austerity, will face tough negotiations with European leaders in the coming weeks or months.

Although no country has ever left the 17-strong euro zone so far and opinion polls show that 80 percent of Greeks want their country to keep the euro, failure to make austerity commitments could still put Greece on the verge of forced exit.

Most experts interviewed by Xinhua said that bailout with austerity could be a better option than rejecting it and going back to Greece's old currency, for the sake of both Greece and the rest of the world, especially the euro zone and European integration.

"Greece needs to face policies of austerity either way, and it's better to do it within the framework of a European program that offers assistance than on its own," said Michele Chang, a professor of political economy with the Brugge-based College of Europe.

Chang said there is some margin for maneuver such as lengthening the time until repayment or reducing interest rates, but the European Union has also to be careful as it does not want to set a precedent for countries like Ireland and Portugal to renegotiate their bailout terms.

Tough road ahead

The Greek issue and the larger debt crisis in the euro zone is set to dominate the G20 summit in Mexico on the next day of the election, while the new Greek leadership will formally negotiate with all other EU leaders at a Brussels summit in two weeks.

Marina Papanastasiou, an economist with the Copenhagen Business School, stressed that without a sustainable growth plan, Greece would face ultimate failure.

The Mediterranean country has been in deep recession for five years running, with deposits in local banks shrinking and unemployment rate increasing.

Chang said the issue has gone beyond austerity and into the need of conducting structural reforms. "For example, the difficulty in collecting taxes in Greece has entered into popular folklore all over Europe by now," the professor said.

Greece has been forced to seek international rescue twice, first 110 billion euros ($137 billion) in May 2010 and then 130 billion euros in March 2012 plus a 107-billion-euro private debt write-off.

"The best scenario is that the new government negotiates an easing of bailout terms and continues with structural reforms so that Greece may eventually get over the debt crisis," Chang said.