Wed Dec 31, 2014 4:08am EST
(Repeats Tuesday item)
* Neither major party may win a majority on Jan. 25
* Centrist To Potami a possible ally for anti-bailout Syriza
* Once dominant PASOK Socialists expected to split
By Renee Maltezou and Deepa Babington
ATHENS, Dec 30 (Reuters) - Greece's splintered political landscape means small, often relatively new parties may determine whether the winner of elections next month can cobble together a lasting government and avoid a new financial crisis.
The Jan. 25 vote marks a showdown between the conservative New Democracy party of Prime Minister Antonis Samaras, who imposed unpopular budget cuts under Greece's international bailout deal, and the radical leftist Syriza of Alexis Tsipras, who wants to cancel austerity along with a chunk of Greek debt.
Syriza holds a lead over New Democracy in opinion polls, although this has narrowed to only about three percentage points in the run-up to the election, called after parliament failed to elect a new Greek president this week.
But neither may be able to form a government alone, even with a 50 seat-bonus that the constitution automatically awards to the biggest party in the 300-seat chamber, leaving one or more of the smaller groups to shape the final outcome.
Dominated for decades by New Democracy and the Socialist PASOK party, Greek politics have been radically reshaped by the debt crisis that forced the country to accept two bailouts worth 240 billion euros ($292 billion) from the European Union and IMF. In return they demanded harsh measures, which have deepened an anti-establishment mood and anger against the old order.
One of the parties most likely to hold the balance of power is To Potami ("The River"), a recently-created centrist group which has refused to define itself as pro- or anti-bailout. The other is PASOK, which was in Samaras's outgoing coalition despite taking an electoral thrashing in 2012, and is now expected to split.
"Small parties were on the sidelines in the past but now will be the determining factor in the coming election," said a senior official from the PASOK faction that is expected to break away in the coming days.
Two small anti-bailout parties, the Democratic Left and Independent Greeks, are possible allies for Syriza. However, the Democratic Left is not expected to win 3 percent of popular vote, the minimum required to enter parliament, and may be absorbed by Syriza before the election.
The right-wing Independent Greeks would make unusual allies for Syriza, with which they have little in common apart from dislike of the bailout deal.
Polls show a group of parties jockeying for third place behind Syriza, which is now the main force on the Greek left, and New Democracy. They are the far-right Golden Dawn, the KKE Communist party, PASOK and To Potami.
Golden Dawn, which has a swastika-like emblem, denies it is neo-Nazi or that it has been involved in violent attacks. Nevertheless, all other Greek parties refuse to deal with it, while the KKE has ruled itself out of any coalition alliance.
That leaves To Potami in prime position to become kingmaker. Set up this year by a prominent TV journalist, the party made its debut in elections to the European Parliament in May, when it came fifth with 6.6 percent.
TAKING FRIGHT
Financial markets took fright on Monday when Samaras was forced to call the election, worrying that Tspiras will win and tear up the bailout deal that saved Greece from bankruptcy. However, if Tsipras were to win but fail to find a coalition partner, Greece could also face a political crisis.
Political analyst John Loulis expected Syriza and To Potami to team up. "Once Tsipras wins, the most stabilising development will be to cooperate with Potami, but both of them will keep denying it until the right moment," he said.
Polls show 5 to 6 percent support for To Potami, which insists it is firmly pro-euro and pro-reform but opposes certain austerity measures. It also wants Greece's debt to be settled within a broader resolution of Europe's problems.
Party leader Stavros Theodorakis has opened To Potami to a deal with either of the big parties, describing his natural allies as the "reasonable" members of Syriza or "the liberals in New Democracy, not the neoliberals".
The other player will be PASOK, whose support has shriveled from 42 percent of the vote just five years ago to 4 to 6 percent. Its future is in doubt, with former Prime Minister George Papandreou expected to set up his own party with some disgruntled PASOK lawmakers.
"Papandreou's party is a huge question now," said Costas Panagopoulos of ALCO pollsters, saying the new group could steal votes from Syriza, PASOK and even New Democracy.
Some analysts speculate that either faction could prop up Syriza if it toned down its anti-bailout stance.
"If Syriza moderates its programme on key issues like the economy and comes closer to our programme, we can support a Syriza government without necessarily participating in their government," said the PASOK official allied with Papandreou.
"Parties that participated in the government during the crisis took a huge risk - that's why some of them shrank or disappeared. They become unpopular to their voters."
For a story with the latest opinion poll, click on
($1 = 0.8220 euros) (Additional reporting by Lefteris Papadimas and Angeliki Koutantou; editing by David Stamp)
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