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Greece heads to the polls (again): Why it matters

Greek election polls show tight race between Syriza and New Democracy

You used to have to wait at least a couple of years for a big Greek vote. But this year three have come along.

With the latest general election results due on Sunday, and polls suggesting a tight race to govern the struggling euro zone economy, CNBC looks at why this could be an important vote for the country – and the single currency.

Toeing the troika’s line

Anti-austerity demonstrators hold up a giant Greek flag in front of parliament in Athens, July 22, 2015.
Ronen Zvulun | Reuters

Arguably at this stage whoever governs is a moot point, as long as they are prepared to fit in with what the country's international creditors want.

So far, the elections have barely caused a ripple in markets, as left-wing Syriza's previously anti-austerity stance appears to have been neutered by leader Alexis Tsipras's climbdown in the summer. Plus polls suggest either Syriza, or the more establishment New Democracy, will be the lead partner in a pro-bailout coalition.

Former Greece's prime minister and leftist Syriza party leader Alexis Tsipras (L) and New Democracy party leader Vangelis Meimarakis stand at their podiums before a televised debate in Athens, September 14, 2015.
Power grab in Greece: Will Tsipras prevail?

The latest poll from the University of Macedonia shows New Democracy on 30 percent of the vote, Syriza with 29.5 percent, ultra-right wing Golden Dawn on 5.5 percent, Pasok, which has seen its vote share almost wiped out by Syriza, at 5 percent, centrist Potami at 5 percent and Syriza breakaway group Popular Unity at 3 percent.

"Each of the three past elections since the first bailout have not solved Greece's deep political crisis, and Sunday's vote will be no different," Wolfango Piccoli, managing director at Teneo Intelligence, warned in a research note.

Disillusioned people

The Greek people, suffering from a deep recession, high unemployment and disillusionment with the political process, is heading to the polls with a heavy tread.

These are "the elections no one wants to vote in" Nick Malkoutzis, the deputy editor of the English edition of Greek newspaper Kathimerini, told CNBC.

A coalition government will likely emerge, possibly even one containing both New Democracy and Syriza. Yet the tenure of this government might be even more important than the bright, but swiftly dashed light of Syriza's, which was disbanded by Tsipras after he was forced to accept the bailout conditions despite pledging to rid the Greeks of austerity.

"A weak government could put at risk the 86 billion euros ($98 billion) program execution, further disbursement of official funds, official debt relief and, ultimately, could re-ignite exit risks," economists at Barclays warned in a research note.

Return of New Democracy?

New Democracy, less than a year after being defeated by Syriza, have appeared gleeful at the party's decline in popularity following its failure to win more concessions from international lenders – in spite of July's referendum on the bailout.

"If Tspiras wins the election, I don't think he has the will or the capacity to deliver...even if he does want to pursue reforms, his party won't let him do that," Kyriakos Mitsotakis, an MP for New Democracy, told CNBC. He reiterated New Democracy's commitment to enacting the bailout reforms.

Don’t rule out Syriza… yet

Syriza can still claim to be relatively fresh, new and untainted by the decades of economic mismanagement which contributed to Greece's current malaise. The scandal around Tsipras's mentor Alekos Flambouraris, who is alleged to have kept his majority stake in a technical services company despite laws banning cabinet members from owning or operating a business, has not helped them.

Greek bailout mistakes were made: European FinMins

Tsipras compared people blaming Syriza for the country's economic problems to someone who drank three bottles of whisky and a shot of vodka then claiming it was the vodka that had given him a hangover.

Whatever his fate on Sunday, this is a season of political change across Europe, and once the Greek election is out of the way, the next potential game-changing votes will come in Portugal and Spain.

- By CNBC's Catherine Boyle