Monday, 19 January 2015

Next Sunday Europe may be facing further Greek culture shocks post their election

There is a snap general election in Greece next Sunday. If Syriza, the hard left anti austerity nationalist party, led by Alex Tsipras wins there will be real consequences for us in the UK, and all across the EU. Mr Tsipras has promised to renegotiate the bail-out package, including by writing-off “most” of the debt.
Yet he also wants to keep Greece in the euro. Despite the trauma of the past five years, a solid majority of about 70 per cent of Greeks wants to stay in the euro. If Mr Tsipras wins this election, he will have triumphed by the simple device of telling the voters exactly what they want to hear, namely that Greece can have the euro without austerity. He may not find it so easy to get any credit or lending if he takes that attitude however, as Mrs Merkel is  not for turning.
The consequences will be a significant shock to European markets, and a real problem: are the Greeks, the Europeans, and us in the UK, serious about living within our means?

Antonis Samaras, the  Greek prime minister, had hoped to battle on and see through the austerity plan that should reduce Greece’s public debt to a mere 110 per cent of national income by 2020. But MPs failed to choose a new president last month, triggering an election for Jan 25.
Mr Samaras, the leader of the centre-Right New Democracy Party, has imposed punitive cuts in exchange for a £190 billion bail-out from the European Union and the International Monetary Fund. With all the passion of a man who believes he is performing the Herculean task of restoring his country to health, the prime minister argues that his policies are finally showing results.             
Indeed, last year, Greece ran a primary budget surplus for the first time since the onset of the eurozone crisis; the economy may even return to growth in 2015.

But the voters beg to differ. Millions of Greeks believe the price of the bail-out has been too high. Youth unemployment stands at 50 per cent and the state is busily laying off thousands of employees.
Alexis Tsipras, the leader of the hard-Left Syriza party, says that Greece is being compelled to suffer “fiscal waterboarding”. At a rally last week, he declared that it was “time for the people, not foreign interests, to decide Greece’s future”.
All the evidence shows that the message of this 40-year-old populist is striking home. Every opinion poll for the past two months has put Syriza in first place with a consistent lead of between three and five percentage points. The latest survey showed the party widening its advantage, reaching 34.5 per cent compared with 29 per cent for New Democracy.
Unless there is a shock of earthquake proportions, Syriza is set to win this election – and Mr Tsipras will then become prime minister of Greece: and his mandate will be we wont pay; debts don't matter; we want to live on borrowed money on our terms.

Full story here: