Greek polls show support for parties backing bailout

By Patrick Donahue

Antonis Samaras, leader of the New Democracy party. Photo / AP
Antonis Samaras, leader of the New Democracy party. Photo / AP

Greek opinion polls showed 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 plan negotiated with international lenders, was placed first in all six opinion polls published on Sunday as campaigning continued for next month's general election.

Antonis Samaras, the party's leader, 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," he said.

As the Spanish Government this week prepares to channel €19 billion ($31 billion) to the Bankia group to restore confidence to its banking sector, Greek electoral rhetoric alluded to what might happen if the 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.

Greeks vote next month following an inconclusive ballot this month.

While the previous election gave New Democracy the biggest share of parliamentary seats, it was insufficient to secure an absolute majority, prompting days of political deadlock before President Karolos Papoulias called new elections.

Samaras' party may seek a coalition with the Socialist Pasok party to gain a majority in the Parliament.

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. Charles Dallara, head of the Washington-based Institute of International Finance, said the cost of Greece exiting the euro would probably exceed €1 trillion.

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 bailout programme.

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 and is "a failed state".

- BLOOMBERG

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