Greeks vote in snap election after crisis-hit year

AFP - Greeks began voting Sunday in a snap election in which the opposition socialists were tipped to ride into power on a wave of anxiety over the country's looming economic crisis.

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.

Prime Minister Costas Karamanlis called the snap election halfway through his four-year term with his New Democracy party, stung and distracted by corruption scandals, finding it increasing difficult to govern as the country faces a dire economic crisis.

Buoyed for years by growth rates 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, intends to address the issue with a two-year austerity policy coupled with a crackdown on tax evasion. Excessive public spending eluded his party's efforts during its five years in power.

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. He also intends to negotiate a new three-year stability pact with the European Commission.

"We are ready to negotiate these issues in a strong and dynamic manner with the European Union," he told AFP in an interview.

Most analysts agree that PASOK is assured of victory against Karamanlis' tired government, which was burdened with scandals and at times seemed unable to enforce policy 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 will have to keep its voters from flocking to the fledgling Green party which gained visibility in the wake of fire disasters 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," he told AFP.

On the other hand, New Democracy must guard itself against defections to the nationalist Laos party which capitalised on growing anxiety over immigrants and a surge of youth violence following the fatal shooting of a teenager by police last December.

Greece's 9.8 million registered voters have until 7 pm (1600 GMT) to cast ballots at over 20,800 polling stations across the country.