Greece’s New Democracy party placed first in all six opinion polls published in the country today as its leader Antonis Samaras said the cost of leaving the euro area would be greater than staying in the shared currency.
New Democracy, which supports Greece’s international bailout agreements, led by a margin of as much as 5.7 percentage points over Syriza, the main party opposed to implementing the terms of financial aid packages, according to a poll by Kapa Research SA for To Vima newspaper.
“Greeks are heading for the polls with different intentions than in the May 6 elections, as 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 said.
The country would go bankrupt, exit the euro and incur greater suffering if it unilaterally broke its loan agreements with international lenders instead of adhering to the deals, Samaras said in a speech to party activists in Athens today.
While New Democracy came first in May 6 parliamentary elections, ahead of Syriza, it failed to secure a parliamentary majority. President Karolos Papoulias set June 17 as the date for new elections after the ballot produced a hung parliament, with parties unable to agree on forming a coalition government.
A return to the drachma would see incomes in Greece and the value of bank deposits and property fall by at least half within a few days, Samaras said. The reintroduced currency would quickly depreciate by at least 50 percent, prices would rise by at least 25 percent and the country’s debt as a percentage of gross domestic product would double, he said.
“No society, no economy and no democracy can tolerate such a sudden collapse in so little time” and comparisons with Argentina’s recovery from its 2001 financial collapse aren’t valid, Samaras said. “Even when Argentina went bankrupt, it was fully sufficient in food and exported meat and grain around the world. What does Greece produce that it can export?”
One of today’s polls, by Marc SA for the Athens-based Ethnos newspaper, gave New Democracy a 2.2 percent point lead over Syriza and said the result would give Samaras’s party 125 seats in the 300-member parliament, enabling it to form a pro-bailout coalition government. The Socialist Pasok party would get 41 seats, according to the poll, enabling the two political groups, who were partners in Greece’s interim government led by Lucas Papademos, to form a coalition.
Greeks would be wrong to believe the nation could remain within the euro region if the country chose not to respect the bailout programs, Samaras said. While a Greek exit would cost Europe 500 billion euros ($600 billion) to 1 trillion euros, allowing it to stay without keeping to the terms of the deal may prompt Portugal, Spain and Italy to pursue a similar path, he said. The bill for that would be 10 times higher, he said.
The cost of Greece exiting the 17-nation euro area would be unmanageable and probably exceed the 1 trillion euros previously estimated by the Institute of International Finance, Charles Dallara, the group’s managing director said yesterday. The projection from earlier this year is “a bit dated now” and “probably on the low side,” he said.
IMF Managing Director Christine Lagarde urged Greeks to adhere to the terms of the international memorandum in an interview with the U.K.’s Guardian newspaper published today, calling on those in the country who try to avoid taxes to help themselves collectively by paying what they owe.
Syriza leader Alexis Tsipras didn’t have any public campaign events today.
To contact the reporters on this story: Paul Tugwell in Athens at firstname.lastname@example.org
To contact the editors responsible for this story: Jerrold Colten at email@example.com