Prime Minister Kyriakos Mitsotakis’s government faces a testing run-up to next year’s election, with the cost of living, a fresh dispute with Turkey and the arrival of new parties on the right all threatening to blunt the impact of this month’s economic package.

Greek singer Giorgos Mazonakis had a hit 15 years ago with a song whose title is a Greek expression for hard times. Politically, that mood is now catching up with the government, even though opinion polls suggest it emerged well from the Thessaloniki International Fair (TIF), the annual event at which the prime minister sets out his economic plans. The package Mitsotakis announced there is being well received by a wider audience than the one that votes for his party, New Democracy (ND).

Mitsotakis has spoken several times in recent days of a difficult winter ahead. The danger for the government is that a wave of price rises will cancel out the benefit of its measures. Every survey identifies the high cost of living as citizens’ biggest problem, and it is being felt ever more sharply as international fuel prices climb.

That is why the prime minister moved early, almost a month before the heating oil season opens, to announce further help at the pump and in household budgets. The heating oil subsidy will return, and the heating allowance, paid to 1.1 million people, will be increased. A cap on profit margins is also being reinstated, and the subsidy on road diesel will continue through October, with further extensions to be considered.

Mitsotakis is also trying to open a delicate debate at European level on temporarily cutting excise duty on fuel, provided the European Commission allows the cost to be excluded from national spending ceilings. Friday’s Eurogroup meeting of eurozone finance ministers in Dublin suggested there is little support for the idea. He is expected to raise it again at the EU leaders’ summit in Brussels in October.

The government must also handle European pressure to tax refineries. It rejects the idea, pointing to their role in exports, while still expecting them to contribute to supporting households.

Rating upgrade and stability

Amid these pressures, Athens received with restrained satisfaction the decisions of two credit rating agencies. On Friday, Scope Ratings raised Greece to BBB+ from BBB with a stable outlook, while Moody’s affirmed its Baa3 rating but moved its outlook to positive.

The decisions carry extra weight because they came at a time of heightened uncertainty in global markets, with borrowing costs still high, geopolitical tensions weighing on economic activity and European economies facing serious challenges.

Political stability is also seen as central to the country’s long-term economic prospects. The government is sharpening its case for an outright majority, arguing that a single-party ND administration is the only viable and credible option. It sees no likely coalition, as the socialist PASOK has ruled one out and Mitsotakis is unwilling to talk to parties to the right of ND.

A tense autumn also lies ahead in relations with Turkey, with attention on the laying of the electricity cable linking Greece, Cyprus and Israel, known as the Great Sea Interconnector. The French investor Meridiam is now leading the project after taking a 66% stake in the project company in August, with IPTO, the Greek grid operator, keeping the remainder. The operator has said about 60% of the seabed surveys are complete, with the rest lying in waters claimed by both Greece and Turkey.

The “sea that is getting a little rough”, as Mitsotakis described the situation in an interview with ERT News, is set to be tested soon. Greek authorities will issue a NAVTEX, a navigational warning to shipping, for the work, which could begin in October. Turkish objections halted survey work off the island of Kasos in 2024, but Athens has private assurances from France that the episode will not be repeated. Ankara is also plainly reluctant to confront head-on a company with a direct line to the Élysée Palace.

Turkey’s so-called Blue Homeland law, meanwhile, is expected to poison an atmosphere that is already toxic, despite the prime minister’s assurances that channels of communication remain open. The bill would write into law Ankara’s maritime claims in the Aegean and eastern Mediterranean, which Athens says have no basis in international law. Reports earlier this year said it was unlikely to reach the Turkish parliament before October. A meeting between Mitsotakis and Turkish President Recep Tayyip Erdogan on the sidelines of the UN General Assembly, which begins this week in New York, looks improbable.

Reaction to the Thessaloniki fair

At home, the government is working with a clearer picture after a series of polls taken straight after the fair, at which all the party leaders appeared. Focus group research, drawing on the quantitative polling data, will soon reach Maximos Mansion, the prime minister’s office, giving a more detailed view of how far the measures have registered with the public.

The overall picture is clear. ND has edged up by almost one percentage point, the Greek Left Alliance (ELAS), founded in May by former Prime Minister Alexis Tsipras, remains second and PASOK third. Tsipras does not appear to have the momentum to climb much further. PASOK’s programme seems to have gone down better than his, although its rise in support is not dramatic either. A separate survey by Opinion Poll for Action 24 put ND on 31% in estimated vote share, ELAS on 15.9% and PASOK on 12.1%.

The government is taking a wait-and-see approach, believing the road to elections in May or June is a marathon rather than a sprint. It expects the measures to register better as they take effect, in other words once people see money in their pockets. Pensioners will benefit first, and civil servants also appear satisfied.

Self-employed professionals, by contrast, seem more worried, and clearly need more persuading by the government’s team. Farmers are in a similar position, although they will see lower diesel prices from 1 November. There are still problems with farmers’ registrations on the tax authority’s platform for subsidy applications, on which year-end payments depend.

The key finding of the polls, according to the analysis at Maximos Mansion, is that the TIF package is finding acceptance well beyond ND’s own support. In many surveys more than 35% approve of the measures, while ND’s estimated vote share is around 30%, or slightly higher (31% in a Marc poll for ANT1). That matters for Mitsotakis’s steady efforts to rally support, largely among voters who have backed ND in the recent past. Aides are also holding on to his personal credibility, as about half of respondents believe the government will deliver on its promises.

That does not automatically translate into votes for ND, but it backs Mitsotakis’s insistence on credibility and lets him look ahead to a possible third consecutive term for the party.

The Samaras factor

Although expectations of an ND victory are overwhelming, the government’s team is trying to gauge the possible effect on the ballot of a party led by former Prime Minister Antonis Samaras. Mitsotakis has adopted a new strategy, in line with what Proto Thema reported last Sunday: he will not engage with Samaras or comment on a party that so far remains hypothetical.

Samaras’s preparations are clearly realistic and advanced, with offices rented and ballot lists largely ready. Mitsotakis, however, does not want to make him an interlocutor. Samaras is weighing which issue to attack the government on next, and some believe it could be energy costs, which hit households hard.

Modelling exercises at Maximos Mansion show that Samaras can draw voters from those who backed ND in 2023, but the numbers are not spectacular. His aides point to the “potential vote” measured by pollsters, yet the tool is unreliable, as the steep fall in support for the party of railway safety campaigner Maria Karystianou shows. A recent Marc poll found an audience of about 5% willing to vote for Samaras and another 7% who might consider it.

The ND machine, for its part, will not leave the emerging party unchallenged, putting pressure on figures who are in talks with the former prime minister and trying to stem defections at every level.

Samaras clearly finds an audience among disgruntled ND voters from 2023, but Maximos Mansion believes he is not currently reaching the core of ND’s present supporters. He is expected to argue that a vote for his party is a vote for stable government, though not in a coalition led by Mitsotakis.

At the same time, Mitsotakis is investing in a strategy of separating the two former prime ministers. He casts former Prime Minister Kostas Karamanlis as something like the soul of the party, implying that Karamanlis will not openly back Samaras.

Kasidiaris returns

The reappearance of former Golden Dawn MP Ilias Kasidiaris is another critical factor for the political system and for Maximos Mansion. Kasidiaris was jailed in 2020 for directing a criminal organisation. He walked out of Domokos Prison on 15 September after serving part of a 13-year sentence and promised to return to politics.

Maximos Mansion believes the legal arsenal is more than sufficient to counter his various manoeuvres. These include the idea of a party founded by third parties, which he could work with as an independent candidate once it has been cleared by the Supreme Court. Independent candidacy is the only form open to him, as he still retains his political rights. The Supreme Court blocked his own party, National Party Greeks, from standing in the 2023 elections.

The real effect of Kasidiaris on party balances has not effectively been measured, although pollsters believe he has a strong pull among young men under 35. He could also trigger a realignment on the right of ND, among Greek Solution, Voice of Reason (led by Afroditi Latinopoulou), Samaras’s party in the making and Karystianou’s party. What these formations have in common is that each can attract protest votes from anti-establishment citizens.

It will also matter how a Kasidiaris party would affect turnout, and with it the number of votes needed to win a seat.