Greece: New Prime Minister - Old Challenges!

This means that the leader of the winning party, Mr. Kyriakos Mitsotakis, has been elected as the new Prime Minister of this country. Although he declared that he would “change Greece”, according to observers, many difficulties and challenges still await the new Prime Minister Mitsotakis.

Greece

FORECASTED WIN

According to figures released by the Greek Interior Ministry, Kyriakos Mitsotakis' New Democracy Party won nearly 40% of the vote, while Prime Minister Alexis Tsipras's ruling Syriza Party received just over 31%. As soon as the results were out, Tsipras conceded defeat and congratulated his opponent.

In fact, the victory of the New Democracy faction is not too surprising, as the party has won consecutively in recent elections. Specifically, in both elections in May and June, the European Parliament (EP) election and local elections, the New Democracy party won against the ruling Syriza party. These unfavorable results forced Mr. Tsipras to ask the President to dissolve parliament and hold early general elections - about 3 months before the current government's term expires.

New Greek Prime Minister Kyriakos Mitsotakis faces a host of challenges. Photo: News.com.au

Once hailed as a “hero” for helping Greece escape the biggest public debt crisis in history - which once pushed the country to the brink of bankruptcy - Mr. Tsipras himself now has to sadly accept the reality that the people of this country are too tired after 8 years of implementing a harsh “belt-tightening” policy.

Looking back at the beginning of his term, Mr. Tsipras steadfastly applied austerity policies to the end. Thanks to that, his government was approved by the troika of creditors including the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) after many years of severe economic crisis. However, although it has escaped the bankruptcy scenario, it must be admitted that since August 2018, Greece is still struggling to develop the economy, with high unemployment.

The Greek people appear to be exhausted by the austerity policies of Prime Minister Tsipras' government.

Not to mention, recently the opposition and the people do not agree with some of Mr. Tsipras's policy views. Typically, there is strong opposition to Mr. Tsipras's agreement to call Macedonia the Republic of North Macedonia - which has the same name as a northern province of this country. Opponents argue that Mr. Tsipras has abandoned part of the country by agreeing to an agreement with Macedonia to resolve the dispute over the name of this northern neighbor that has lasted for the past 27 years. And that most people oppose it because they are concerned that this coincidence could lead to a territorial dispute with the neighboring country.

Facing Old Challenges

The victory of the new Prime Minister Mitsotakis can be said to be based on fatigue and dissatisfaction with the previous administration. However, such disappointments will set higher expectations for the next leader. Elected Prime Minister in the context of Greece still facing many difficulties, especially economic difficulties, according to observers, Mr. Mitsotakis will have to face a series of challenges that are not new!

The anticipated transfer of power between predecessor Alexis Tsipras and new Greek Prime Minister Kyriakos Mitsotakis. Source: DW

First of all, it is the responsibility of stabilizing Greece's finances to continue to satisfy the trio of creditors, create friendliness to businesses and attract investment, and revive the economy. Specifically, Mr. Mitsotakis will have to solve a series of problems from government finances, remaining loans, and bureaucratic policies that still permeate the government. Importantly, all reforms or innovations must still be within the framework of strict financial restrictions imposed by the creditors. In addition, bad debt is also an issue that Mr. Mitsotakis's government must worry about. Solving about 80 billion euros of bad debt left by the previous government can be said to be a difficult legacy!

Greeks need strong reforms. Photo: AFP

Another of the new Prime Minister Mitsotakis’s top tasks and challenges is attracting investment, with the goal of doubling Greece’s growth rate to around 4% by 2020. Looking back from 2018 to now, the Greek economy has improved by around 1.9% and is on track to grow above 2% this year. But this growth is still not enough to meet the 3.5% annual growth commitment made to international creditors until 2022.

To convince investors, new Prime Minister Mitsotakis is expected to revive the long-delayed Hellinikon project. The $7 billion project is expected to transform the abandoned Hellinikon airport complex into one of Europe's largest resorts with around 8,000 hotels, apartments, shopping malls and entertainment centers, twice the size of New York's Central Park. The project is expected to be a turning point for the Greek economy with around 10,000 - 70,000 new jobs for the people.

New Prime Minister Kyriakos Mitsotakis is expected by the people to bring a new Greece. Photo: AFP - Getty

Meanwhile, in terms of energy, the new Greek Prime Minister will also have to prioritize the Public Power Corp. Greece’s largest electricity supplier is already struggling with a loss of more than 500 million euros in 2018. In addition, there are a series of issues such as governance, security, immigration, foreign policy, etc.

For his part, speaking to the press immediately after the first preliminary results were announced, Mr. Mitsotakis affirmed that this victory has given him a clear and strong mandate to change Greece. He also said that he will soon negotiate with European creditors as soon as the new government is formed, in order to reduce the tax burden from austerity policies and stimulate investment and development in the country. Despite his determination, it can be seen that solving this mountain of challenges will cost the new Greek Prime Minister a lot of time and effort. And whether he can meet the voters' wishes or not, this question will take a long time to answer!