The upcoming general election in Greece could spark some positive momentum in the markets, a former finance minister told CNBC Friday.
Greece has long been a challenge to the stability of the euro zone after entering a financial crisis back in 2010. After three consecutive bailout programs, which ended last summer, the Greek economy is now at a crossroads ahead of a general election, due on July 7.
"Markets are looking forward to a New Democracy win," George Papakonstantinou, former finance minister said about the conservative party ahead of the country's upcoming elections.
Prime Minister Alexis Tsipras called a snap election last month, after results of the European elections showed a higher support for the opposition New Democracy. Opinion polls suggest that if the election were to take place now, the conservative party New Democracy would win with about 37 percent of the votes. Syriza would come second with about 26 percent.
Markets in Greece have been on a roller coaster ride in the last ten years. The yield on the 10-year Greek government bond is currently trading at about 2.590%, having previously hit a high above 12% back in 2015 – the year when the ruling left-wing populist party Syriza first came to power and challenged the European rules.
Syriza had an outspoken anti-austerity stance, but that softened over time, in particular in 2015 after the replacement of Yannis Varoufakis as finance minister for Euclid Tsakalotos, the current finance chief.
Kyriakos Mitsotakis, leader of the conservative party New Democracy, told CNBC last February that he wants to bring down taxes for domestic and international businesses in what he described as an "aggressive and comprehensive tax reform."
"This is something we can deliver within the first month (in office)," Mitsotakis said.
His proposals include a plan to bring down the corporate tax rate to 20 percent in two years. However, the current government is also trying to make Greece more attractive to businesses by gradually lowering the corporate tax rate from 29 percent in 2018 to 25 percent in 2022.
Mitsotakis also said he will seek to renegotiate certain agreements with the European creditors – something that was reiterated by finance minister Euclid Tsakalotos.
"(Mitsotakis) is smart enough to know that (negotiating with the European Union) is not the first thing to do when you go to Brussels. You first show what you made of, you show you're willing to do reforms where Syriza was not, you open more the country to investment and on the back of that you enter negotiations," Papakonstantinou said.
Correction: An earlier version of the article said George Papakonstantinou is a member of New Democracy. The current version has been updated to correct that.