BERLIN (Bloomberg) — Greek opinion polls show voters warming to parties supporting the European Union’s bailout agreement as political leaders at home and abroad warned of economic catastrophe should the single currency fragment.
New Democracy, which supports the austerity plan negotiated with international lenders, placed first in all six polls published on Saturday as campaigning continued for next month’s election. Party leader Antonis Samaras sought to sketch out the consequences of a euro exit, saying Greek incomes, bank deposits and property values would lose at least half their value within days, while food prices would rise by a quarter.
“No society, no economy and no democracy can tolerate such a sudden collapse in so little time,” Samaras told party activists in a Saturday speech in Athens.
As the Spanish government this week prepares to channel 19 billion euros ($24 billion) to the Bankia group to restore confidence to its banking sector, Greek electoral rhetoric alluded to what might happen if the 2 1/2-year debt crisis deteriorates. Pressure also built from outside as International Monetary Fund Managing Director Christine Lagarde upbraided Greek taxpayers and Juergen Fitschen, the incoming co-chief executive officer of Deutsche Bank, referred to the country as a “failed state.”
New Democracy led the biggest anti-bailout party, Syriza, which was at or near the top of the polls last week, by a margin of 5.7 percentage points, according to a survey by Kapa Research for To Vima newspaper. The smallest margin was 0.5 percent. Greeks vote on June 17 following an inconclusive ballot on May 6.
One poll by Marc for the Ethnos newspaper, gave New Democracy a 2.2 percent point lead over Syriza and said that would give Samaras’ party 125 seats in the 300-member parliament. The result would enable it to form a pro-bailout coalition with the Socialist Pasok party, which the poll said would get 41 seats.
“A large part of the electorate seems to be replacing its anger with concern for the dangers of leaving the country ungoverned and of an exit from the euro,” Athens-based To Vima wrote in a commentary on Saturday.
While the May 6 vote gave New Democracy the most parliamentary seats, the party fell short of a majority, prompting days of political deadlock before President Karolos Papoulias called new elections.
Greek voters face a choice between supporting a review of the country’s aid package or the “blind and catastrophic” route of terminating the deal unilaterally, Evangelos Venizelos, Pasok’s leader, said Sunday.
The cost of Greece exiting the euro would probably exceed 1 trillion euros, Charles Dallara, head of the Washington-based Institute of International Finance, said May 25. Dallara said in an interview that those believing a departure by Greece would be manageable “should think again.”
“It’s not really in Greece’s interest to leave the euro,” Charles Lieberman, chief investment officer at Advisors Capital Management, said Friday on Bloomberg Television’s “Street Smart.” If Greece departs, “their currency collapses, inflation goes through the roof, they have to walk away from all their obligations - and they’re outcasts within Europe. And for what? What does it get them?”
EU leaders wrapped up a six-hour summit last week by urging Greeks to vote for parties supporting austerity measures tied to the 240 billion-euro bailout. Euro finance ministers and leaders do not plan to meet again until after the election.
The tensions surrounding Greece were underscored by comments from Lagarde and Fitschen. The IMF head told the Guardian newspaper that children in Africa needed more help than the Greeks, who were “trying to escape tax all the time.” Deutsche Bank’s Fitschen said Greece’s political system is unable to escape corruption.
“Greece is the only country, I feel, where we can say it’s a failed state, it is a corrupt state, corrupt as far as its political leadership is concerned and obviously other people had to be willing to support this,” Fitschen said in a speech at a conference in Berlin on Friday.
Lagarde posted comments on Facebook Sunday saying she sympathized with Greece, while reiterating that the most privileged should pay their taxes.