Greece gave a positive surprise Eurozone And short term prospects they are good for her, but elections they can bring to power a government less committed to reform and financial stability from today, warns Capital Economics.

According to the think tank, the most likely outcome would be a coalition government between the two N.D. And PASOK or between SYRIZA and PASOK. “There is a big difference in the platforms of the two main parties,” analysts at Capital Economics emphasize. As they explain, New Democracy is very focused on the economy as it plans to raise wages and boost growth and investment while reducing debt to 140% of GDP by 2027.

SYRIZA is paying more attention to social causes, promising, among other things, a 10 percent increase in civil servants’ wages and the minimum wage, higher spending on education and health care, higher pensions, protection from housing auctions, taxation of surplus energy, and lower VAT on food.

Of course, Capital Economics acknowledges that the extent to which things will change with a new government remains highly uncertain.

Although the SYRIZA program foresees a much higher budget deficit, the party’s track record after the 2015 referendum suggests that it may be much less radical in power than it was before the election.

And while the ND-PASOK coalition could theoretically mean more continuity with the current government, some compromises will be required, so politics could move away from the relatively “orthodox” approach of recent years.

In any case, Capital Economics emphasizes that Greece’s short-term outlook still looks better than that of most eurozone countries. The economy is on strong momentum, with GDP 6.4% above pre-pandemic levels (compared to 0.2% growth in the eurozone as a whole). The house thus speaks of a huge opportunity for recovery as GDP remains 20% lower compared to the first quarter of 2008.

It also notes structural progress in the economy in recent years, as bad loans have declined, tax rates have fallen, the business climate has improved, and public finances have become more stable.

At the same time, the chamber notes that Greece is less affected by the increase in interest rates compared to other countries.