ATHENS, Greece (AP) Conservative party leader Kyriakos Mitsotakis was sworn in as Greeces new prime minister today, a day after his resounding win over left-wing Alexis Tsipras, who led the country through the tumultuous final years of its international bailouts.
Mitsotakis, 51, was elected on a pledge to cut bailout-era taxes and ease draconian budget targets set by Greeces creditors during the years of financial rescue commitments that could be put to the test later today in Brussels when finance ministers from across the 19 European Union countries that use the euro currency meet to consider Greeces ongoing obligations to lenders.
The people gave us a strong mandate to change Greece, and we will honor that commandment in full, he said after his swearing-in ceremony at the presidential mansion.
Tsipras, 44, joined the ranks of financial-era prime ministers who lost elections after having to impose deep spending cuts and tax hikes on the countrys citizens.
Transforming his Syriza party from a small radical left group to a party of power, he won 2015 elections on promises of repealing bailout austerity measures but was soon forced to change tack. His government signed up to a third international bailout, with accompanying mandated reforms, after tumultuous negotiations with creditors.
Mitsotakis New Democracy party won 39.8% of Sundays vote, giving him 158 seats in the 300-member parliament, a comfortable governing majority. Tsipras Coalition of the Radical Left, or Syriza, garnered 31.5%. The extremist right-wing Golden Dawn, Greeces third largest party during the height of the financial crisis, failed to make the 3% threshold to enter parliament.
Mitsotakis, the son of a former prime minister and brother of a former finance minister, will have to move fast to deal with the myriad of problems still plaguing the economy, with an overdue inspection from Greeces former bailout creditors amid warnings that the countrys public finances have gone off-track.
Greece was on the agenda of todays meeting of euro area finance minister even despite no longer directly receiving bailout loans.
Greeces economy shrank by a quarter and poverty and unemployment levels soared during the countrys nearly decade-long financial crisis. Although its finances have improved dramatically and the economy is expected to grow by 2.2% this year, it still has a long way to go to make up the economic output lost.
The countrys debt stands at about 181% of annual gross domestic product and Greece has pledged to continue producing large primary surpluses the budget excluding debt servicing of more than 3% of GDP for years to come to repay its debts.
Mitsotakis said Sunday he would stick to his campaign pledges of lowering taxes, attracting investments and cutting through red tape to make Greece more business-friendly. He wants bailout creditors to lower primary surplus demands but it was unclear how they would respond to that.
New Democracys clear victory in Greeces parliamentary elections yesterday will be welcomed by investors, said economics consultancy Capital Economics in a research note. But it will not be a game changer for the economy, not least because the government will still be constrained by its membership of the single currency and its surveillance agreement with the EU.
That caution was evident in the performance of the main stock market in Athens, which was down 1.4 percent in midday trading Monday as investors booked profits generated during the recent rally that was largely based on expectations of a Mitsotakis victory.
Mitsotakis will also have to contend with pension increases and other benefits the outgoing government granted ahead of European elections in May benefits which European creditors had warned could make Greeces fiscal targets hard to meet.
He will soon be confronted with the fiscal impact of the last measures approved by the outgoing Tsipras government, said Paolo Pizzoli, a senior economist at ING.
After Sundays election, Greek borrowing rates continued to fall with the 10-year government bond yield hovering just above 2%. Shares on the Athens Stock Exchange were 1.35% lower following successive increases ahead of the widely anticipated election result.
