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Greece votes with govt on its heels over economy

Sunday, October 04, 2009 ATHENS: Greeks voted in a snap election Sunday with the opposition socialists expected to top Prime Minister Costas Karamanlis' party, which has been hit by corruption scandals and a badly slumping economy. Led by former foreign minister George Papandreou, son of late prime minister Andreas Papandreou, the socialist PASOK party held a lead of 5-7 points over the ruling conservatives in the final opinion polls published two weeks ago. Karamanlis called the election halfway through his four-year term with his New Democracy party, distracted by corruption scandals, finding it difficult to govern as the country faces a dire economic crisis. Buoyed for years by growth rates of around four percent partly attributed to EU funds, Greece is now on the brink of recession with output growth at near zero. Greece's public debt, one of the highest in the eurozone, is set to exceed 100 percent of GDP this year, and the European Union placed the country under supervision in April over its excessive budget deficit. Although Greece's service-oriented economy avoided the worst effects of the global financial crisis for months, the expected loss of some three billion euros from the tourism and shipping industries that constitute the economy's main income sources will be a heavy blow. If re-elected, Karamanlis, 53, plans a two-year austerity policy coupled with a crackdown on tax evasion. Papandreou, 57, proposes to invigorate the economy with salary and pension hikes above the rate of inflation in 2010. He has announced a 100-day plan to boost the market, create jobs and clean up public finances. "Massive sums are being lost (to corruption)," Papandreou said in an interview. Many analysts say PASOK is assured victory against Karamanlis' government, which at times seemed unable to enforce its will with a mere one-seat majority in parliament. Under the current electoral law the socialists will need to win between 40 and 42 percent of the vote for a workable majority in parliament. In particular, PASOK must keep its voters from flocking to the fledgling Green party, which gained visibility in the wake of fires which killed 77 people in 2007 and scorched Athens' eastern flank this summer. The level of support for the Greens, who need three percent of the vote to enter parliament, could doom PASOK's aim of forming a government on its own. "The undecided vote is around 10-15 percent," noted Thomas Gerakis, head of Marc polling institute. "These voters could well turn to the smaller parties if the perception is that PASOK is going to win an outright majority." Karamanlis' party must guard against defections to the nationalist Laos party, which has capitalised on immigration fears and a surge of youth violence after the fatal shooting of a teenager by police in December. Greece's 9.8 million registered voters have until 7 pm (1600 GMT) to cast ballots. Exit polls are expected to be released shortly after the polls close and a projection based on a 20-percent vote sample is expected by 1900 GMT.

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