Analysts expect a short period of uncertainty in the possible case of lack of self-sufficiency from the side May 21 elections and the country is being led to a second election.

In its analysis, Reuters reports that the prevalence Kyriakou Mitsotakis will reassure investors given its strong relationship with the EU and its commitment to reform. However, he notes that his victory SYRIZA cannot disrupt markets, as it did in 2015.

“Greece is in a very different situation than it was in 2015, when it was very close to leaving the eurozone, and in the short term, no one has serious concerns,” said Andrew Kenningham, chief European economist at Capital Economics.

Here are five questions for markets about national elections:

What is the biggest problem for voters?

A cost-of-living crisis where inflation hits the purchasing power of consumers. Inflation rose to 12.1% in September and has since slowed to 4.5% year on year due to lower energy prices. Average annual wages are still about 25% below their peak since 2009, according to the OECD.

“Over the past 10 years, we have seen huge pay cuts and people have really felt it,” said Wolfango Piccoli, co-chairman of financial consultancy Teneo.

What does the election mean for a return to investment grade?

With three of Greece’s four credit ratings just one notch below investment grade, the election is likely to be the country’s final hurdle in regaining a status it lost a decade ago.

S&P Global said it could upgrade Greece’s rating to BB+ over the next year if the new government maintains fiscal discipline and the pace of reforms that will unlock EU Recovery Fund funds.

Goldman Sachs said the implementation of Kyriakos Mitsotakis’ plan to roughly triple spending on EU funds this year could be the “final step” on the road to modernization.

Greece’s long-term borrowing costs, at about 4%, are already lower than in Italy and a recovery in investment grade is likely to bring them down.

But much of the good news about Greece’s rating may have already been priced in by the markets, said BlueBay Asset Management portfolio manager Caspar Hense.

Will investors leave Greece if Mitsotakis loses?

Probably not. Investors see Mitsotakis’ leadership as stable due to his close ties to the US and Brussels, but views on SYRIZA have changed a lot since the financial crisis. Greece has one of the best growth rates in the Eurozone.

“Investors are primarily looking at political stability and will welcome the retention of Mitsotakis as prime minister,” Teneo’s Piccoli said, adding that the current prime minister “clearly supports the markets.”

A SYRIZA-led government could hurt that sentiment, but a repeat of 2015, when a SYRIZA victory sent Greek equities into a 24% free fall and Greek 10-year bond yields to 19%, is seen as unlikely. “SYRIZA has become much more systemic since its tenure in government, so we stand little chance of seeing another repeat of 2015 volatility,” said George Lagarias, chief economist at Mazars Wealth Management.

What does the election mean for Greek stocks?

A decisive victory for the New Democracy or SYRIZA could strengthen short-term superiority. The Athens Stock Exchange is up about 21% this year, while the European STOXX 600 is up about 10%. The special weight of banks, reinforced by higher interest rates, helps explain the outperforming ASE.

Investors will follow the government’s plans to sell HFSF assets in Greek banks by the end of 2025. HFSF owns approximately 40% in the National Bank of Greece, 27% in Piraeus Bank, 9% in Alpha Bank and 1.4% in Eurobank.

“The good news is that after the election and return to investment grade, interest in banks will increase and their valuations will improve,” said Al Alevizakos, chief executive of AXIA Ventures.

What about the euro?

Elections, which in the past were the trigger for the sale of the euro, this time are not a guide for investors.
The EU recovery fund and the ECB’s emergency bond buying tool eased concerns about the breakup of the eurozone.
“The whole ‘regional pressure’ thing has really taken a backseat,” said Adam Cole, head of FX strategy at RBC Capital Markets.