The traditional centre-right party is set to regain power in Greece after a sweeping general election victory, raising hopes of a return to growth and stability in a country rocked by years of recession and three international bailouts.
Kyriakos Mitsotakis’s New Democracy party was forecast to win 38-42 per cent of the vote, according to exit polls, compared to 26-32 per cent for the leftist Syriza party of Alexis Tsipras, the prime minister.
Mr Mitsotakis, a US-educated McKinsey alumnus and son of a former prime minister, said he would focus first on cutting taxes, reducing red tape and attracting foreign investment to create jobs and stem migration abroad by skilled young Greeks.
The result is a heavy blow for Mr Tsipras, the one-time radical firebrand who abruptly reversed his policy stance and adopted a harsh austerity programme in return for an €86bn bailout after Greece came close to crashing out of the eurozone in 2015.
While the economy stabilised under the Syriza government, structural reforms lagged and growth targets were missed after the finance ministry raised taxes and slashed public spending to achieve the annual primary budget surplus agreed with Greece’s bailout creditors.
Mr Tsipras gambled by calling a snap election to rally leftwing support after Syriza finished 9 percentage points behind New Democracy at the European Parliament elections in May.
But voters dismissed the prime minister’s claims during the campaign that a conservative government would slash wages and social benefits, and sell state-owned assets at low prices to foreign investors.
Greeks have also been angered by the way that high tax rates have eroded middle-class incomes while unemployment is stuck at around 18 per cent, the highest in the eurozone.
“Greeks are fed up with high taxes, weak growth and very low rates of job creation,” said Aris Hatzis, an Athens university professor. “They’re expecting taxes to be reduced and they view foreign investment more favourably than in the past.”
While yields on Greek bonds have fallen dramatically in the past few months, the economy is growing more slowly than forecast and investors remain wary. The country is still under close surveillance by the bailout creditors, with a backlog of structural reforms yet to be carried out.
Bailout monitors from the EU and IMF are scheduled to arrive in Athens in the next few days to review progress amid concerns that a €1.4bn package of handouts by the Syriza government before the European elections would derail this year’s budget targets.
ND appeared set to capture between 155 and 167 seats in the 300-member parliament, depending on how many small parties attain the three per cent of the vote threshold for entering parliament.
Three such groups — the neo-Nazi Golden Dawn, the nationalist Greek Solution and the Mera25 party of Yanis Varoufakis, the maverick former Syriza finance minister — were battling on Sunday night to be represented in the chamber.
Mr Mitsotakis is expected to announce his cabinet on Monday. He said it would include “people of my generation”, including technocrats without a background in Greek politics and personalities from the centre-left.