by Michael Haltman
In an article last week, ‘Greece Election Sunday And Why The Entire World Is Watching!‘, the potential fallout from a Syriza party victory in the Greece election was examined:
‘This Sunday the citizens of Greece will be voting in a national election that will serve as a referendum on the EU-invoked austerity program that the country has been living through!
At stake is the decision that a newly elected government might make to pull Greece out of the Eurozone in what has widely become termed Grexit.’
Now the results are in and the expectation/fear of this result has been realized with Syriza reportedly winning 150 of 300 seats along with a coalition for a majority said to have been formed with the right-wing Independent Greeks party!
What is the next step in Greece/EU and, after this election victory by Syriza, does a potential domino effect exist where some of the other weak links in the Eurozone will take notice and vote down austerity as well?
Here is a brief synopsis…
Greece’s current bailout programme ends in February, and economists say a short term deal will be negotiated, but difficult talks lie ahead. Germany has indicated that it is not prepared to renegotiate the bailout terms, raising the prospect that Greece could end up leaving the eurozone.
Chief European economist at Capital Economics, Jonathan Loynes said:
“There is a danger of a prolonged stand-off with the troika as Syriza attempts to negotiate some form of official debt restructuring while not reneging on its promises to voters to cut taxes, raise government spending and increase the minimum wage.”
Michael Hewson, chief market analyst at CMC Markets, said:
“Tsipras’s comments don’t appear to leave any room for doubt as he stated that the troika and the bailouts belong to the past,.
“You can be almost certain that these negotiations will be watched carefully by the anti-austerity movements in Spain, Portugal, Italy and France to see what measures if any Greece is able to get out of EU politicians to deal with the problem of Greece’s debt, and the terms of the bailout programme.” (Source: BBC)