It continued to be popular for much of its second term, especially in March 1987 when Andreas Papandreou successfully handled a crisis in the Aegean with Turkey. By late 1988 however, both the government's popularity and Papandreou's health had declined. The former, because of press reports of financial and corruption scandals that surfaced, implicating Ministers and, allegedly, Andreas Papandreou himself as well as because of fiscal austerity measures imposed after the Keynesian policies of the first term. PASOK lost the June 1989 elections with 40% of the vote while the opposing New Democracy received 44.3%. PASOK had changed the electoral law before the elections, making it harder for the leading party to form a majority government, so the legislature was deadlocked.
