Monday, January 26, 2015

Greece: Anti-austerity Syriza strikes fear into the EU

Election victory of radical party coalition poses threat of default on bailout loans, and a breakdown of austerity-based reform package...

By Andrew Rosenbaum (aa.com.tr)
 " Greece leaves behind the austerity of destruction," were practically the first words out of Syriza leader Alexis Tsipras' mouth once victory in the Greek election Sunday was assured.

"Greece is turning a page, it’s leaving behind five years of humiliation and misery. We are putting together a government of social deliverance to carry out our program and negotiate with Europe," he declared.

Syriza won 36.3 percent of the vote, while the ruling coalition saw only 27.8 percent, giving Syriza with a projected 149 seats in the 300-seat parliament -- two short of an absolute majority needed to form a single-party government.

The far-right Golden Dawn party was third with 6.3 percent, and the center-left River fourth with 6.1 per cent.

Syriza has already formed a governing coalition, one that poses a grave challenge to the European Central Bank and the European Monetary System.

Dangerous challenge

"Europe needs to prepare to accept that Greece’s five long years of austerity will shepherd into power a radical, Populist Party with no prior governing experience," warned Brookings Institution political analyst Daniel V. Speckhard in a note published Thursday.

Syriza will pose a dangerous challenge to the European Union, he added.

A discussion on existing bailout measures will delay Greece’s access to loans it badly needs.

The major banks risk a €2 billion ($2.24 billion) shortfall without an injection of funds from the bailout, and the government won’t be able to pay civil servants’ salaries within a few months of a bailout breakdown, according to credit agency Fitch Ratings.

Further, a default on debt could create a run of capital out of the Euro-zone, as investors lose confidence in the single monetary system.

"A Greek default would shake the Eurozone," said Christian Schulz, an analyst at Berenberg bank in a note released Monday.

High stakes

About two percent of all bank deposits have already been pulled out of the country by investors just ahead of the elections, according to Fitch.

Many long-suffering Greek taxpayers actually stopped paying taxes in December, ahead of an expected Syriza victory that would bring them an amnesty, the Financial Times reported Thursday.

Receipts dropped €1.5 billion, the report said.

Yet the program of a new government headed by Syriza is certain to include demands to Greece’s creditors to either restructure, or write off part of the country’s outstanding €348 billion ($391.1 billion) in public debt.

The stakes are highest for Germany.

A "haircut” on the Greek debt would cost Germany about $40 billion, according to economist Timo Wollmershäuser from the Ifo Institute for Economic Research in a note published Monday.

Stern warnings

So it is not surprising that Germany has already issued stern warnings to Greece about the dangers of rocking the boat.

German Finance Minister Wolfgang Schaeuble said in a speech at the World Economic Forum on Friday that “ Greece must undertake strong efforts to remain competitive. Reforms must continue as planned, ifGreece intends to get the benefit of the European Central Bank’s stimulus program."

International Monetary Fund Managing Director Christine Lagarde issued a similar warning last Wednesday: "A debt is a debt and it is a contract.

"Defaulting, restructuring, or changing the terms has consequences on the signature and the confidence in the signature," Lagarde stated in an interview with the Irish Times.

The IMF, along with the European Central Bank and the European Union constitute the "Troika" which holds Greek public debt.

The Troika wants to see further austerity measures pushed through by the Greek government.

Jobs lost

As far as the Troika is concerned, the Greek government should be discussing further cuts in public sector employment and reduced pensions.

More than 30,000 Greek public sector workers have already lost their jobs as a result of austerity measures, and the Troika has asked for 11,400 more in March 2014, according to the most recent IMF report on the country released in May 2014.

But Syriza is on a different planet, as far as the Troika is concerned.

"We need to renegotiate the logic," said Professor Yanis Varoufakis, a Syriza economist and candidate for a seat in parliament, speaking to the Wall Street Journal on Jan. 23.

"The Syriza economic plan is rooted in the core principles of debt forgiveness and higher government spending, which Germany has rejected," Varoufakis said.

While not explicitly considering a default, the Syriza economist does not rule it out.

"Our objectives," he said, "are humanitarian -- there has been too much suffering."

'Archons of austerity'

For some economists, Syriza has a point.

"The thing that strikes me about Europe’s archons of austerity, its doyens of deflation, is their self-indulgence," writes laureate economist Paul Krugman in a recent column.

"They felt comfortable, emotionally and politically, demanding sacrifice (from other people) at a time when the world needed more spending. They were all too eager to ignore the evidence that they were wrong."

But it is too late to decry the Troika’s mistakes.

Greece and the authorities of international finance are headed for a brutal confrontation.

It can only be hoped that the rest of the world does not suffer the effects as well.

http://www.aa.com.tr/en/headline/456083--greece-anti-austerity-syriza-strikes-fear-into-the-eu
26/1/15
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6 comments :

  1. Greek radical-left leader vows to end 'humiliation and pain' ...

    Greek leftist leader Alexis Tsipras promised on Sunday that five years of austerity, “humiliation and pain” imposed by international creditors were over after his Syriza party swept to victory in a snap election on Sunday.

    With more than 99 percent of votes counted, Syriza was set to win 149 seats in the 300-seat parliament, taking 36.3 percent of the vote, 8.5 points ahead of the conservative New Democracy party of outgoing Prime Minister Antonis Samaras.

    The resounding victory left Syriza just two seats short of an outright majority, meaning Alexis Tsipras will need to find a coalition partner.

    Syriza's 40-year-old leader was sworn in as Greece’s new prime minister on Monday, putting him at the head of the first eurozone government openly opposed to the kind of severe austerity policies which the European Union and International Monetary Fund imposed on the country as a condition of its bailout.................http://www.france24.com/en/20150125-live-blog-greece-general-election-syriza-europe/
    26/1/15

    ReplyDelete
  2. Londres anticipa incertidumbre tras la victoria de Syriza ...

    El primer ministro de Reino Unido, David Cameron, advirtió que la victoria de Syriza en las elecciones griegas "incrementará la incertidumbre económica en toda Europa".

    La postura del líder conservador coincide con la opinión más extendida en la City de Londres, eminente centro financiero del país.

    Entre ellos, Maria Pacia Toschi, analista en JP Morgan Asset Management, pronostica un "periodo de prolongada incertidumbre en los mercados mientras progresan las negociaciones" entre el nuevo Gobierno liderado por Alexis Tsipras y sus socios en la Unión Europa (UE)..................http://mundo.sputniknews.com/politica/20150126/1033652111.html
    26/1/15

    ReplyDelete
  3. Der "Grexit" ist nun ein wahrscheinliches Szenario...

    In Griechenland beginnt der Showdown um die Staatsschulden. Schon heute treffen sich die Finanzminister der Euro-Zone. Die "Welt" stellt vier Szenarien vor, wie es in Griechenland weitergehen könnte.

    ......Szenario 1: Tsipras scheitert in sechs Monaten

    Tsipras braucht zum Regieren einen Koalitionspartner und hat sich für die rechtspopulistische Partei der Unabhängigen Griechen entschieden. Auch diese lehnt den Sparkurs der Geberländer vehement ab. Sollte das neue Regierungsbündnis aber keinen Schritt auf die internationalen Gläubiger zugehen und Griechenland die Pleite drohen, könnte der Regierungskurs in der Öffentlichkeit auch auf Kritik stoßen...............http://www.welt.de/wirtschaft/article136782481/Der-Grexit-ist-nun-ein-wahrscheinliches-Szenario.html
    26/1/15

    ReplyDelete
  4. Was macht Tsipras?...

    Alexis Tsipras hat im Wahlkampf viel versprochen. Hält er diese Versprechen ein? Drei Beispiele, vor welchen Entscheidungen er nun steht.

    .....Tsipras hat noch in seinen letzten Wahlkampfauftritten gesagt, dass nun Schluss sein müsse mit der Sparpolitik. Die Troika der Griechenland-Gläubiger sei abgewählt, sagte er danach. Denn für die versprochenen Zusatzausgaben und Steuersenkungen ist im Sanierungsprogramm mit der Troika kein Platz. Im Gegenteil, viele Griechen haben schon im November und Dezember die Steuerzahlungen zurückgehalten, in der Hoffnung auf einen Wahlsieg von Tsipras.

    Doch wenn sich Griechenland nicht an die Vereinbarungen hält und wenn nicht bis Ende Februar die Hilfsprogramme für Griechenland verlängert werden, findet sich die Regierung vor leeren Kassen und womöglich einem neuen Bankenkonkurs. Die letzte Tranche der Hilfskredite von 7,2 Milliarden Euro wird nur ausgezahlt, wenn es ein Sanierungs- und Reformprogramm mit der Troika gibt. Nur in diesem Falle kauft die Europäische Zentralbank griechische Staatstitel, wird aus Frankfurt die Liquiditätsversorgung für die Banken aufrechterhalten...................http://www.faz.net/aktuell/wirtschaft/eurokrise/griechenland/griechenland-kann-alexis-tsipras-seine-wahlversprechen-halten-13391090.html
    26/1/15

    ReplyDelete
  5. Guindos: 'Grecia necesita 10.000 millones antes de agosto' ...

    El ministro de Economía español, Luis de Guindos, ha dado la enhorabuena a Alexis Tsipras por los resultados electorales del domingo y ha garantizado que el Eurogrupo seguirá negociando con Syriza igual que hizo con sus predecesores. Pero, al mismo tiempo, ha recordado que Atenas necesita 10.000 millones de euros adicionales de aquí al verano y que la única forma de obtenerlos es gracias a la solidaridad europea, pues los mercados siguen cerrados.

    "Hay que felicitar al nuevo Gobierno griego. Es el resultado de unas elecciones democráticas positivas desde todos los puntos de vista. En el Eurogrupo estamos abiertos, como ya ocurría con los anteriores gobiernos, a continuar la negociación con ellos. En estos momentos, como saben, Grecia no tiene acceso a los mercados y tiene que continuar financiándose. Hay unas necesidades de financiación importante en los próximos meses y por supuesto el Eurogrupo está dispuesto a hablar con ellos"...........http://www.elmundo.es/economia/2015/01/26/54c65d5c268e3e04578b457c.html
    26/1/15

    ReplyDelete
  6. Finanzmärkte: Die Euro-Zone hat Griechenland abgeschrieben...

    Der Dax steigt auf Rekordhoch. Auch der Euro scheint ungerührt. Es wird offenbar, dass der Markt die Hellenen bereits abgeschrieben hat. Dadurch stürzt die Drohkulisse der neuen Athener Regierung ein.
    Dieser Montag hält zwei Nachrichten parat: eine gute für Europa, eine schlechte für Griechenland.

    Die Wahlen in Griechenland haben eigentlich das denkbar schwierigste Ergebnis für die Börsen gebracht. Einen überraschend deutlichen Sieg des Linksbündnisses Syriza. Und damit nicht genug. Parteichef Alexis Tsipras, der unter Börsianern auch der Hugo Chavez von Griechenland genannt wird, wird mit der rechtspopulistischen Partei Unabhängiger Griechen koalieren.

    Damit werden die Märkte und Europa mit der "stärkstmöglichen Anti-Troika-Politik" konfrontiert, wie John Norman, Stratege bei der Investmentbank JPMorgan anmerkt. Doch allein die Börse in Athen hat sich vom Griechenland-Schocker schrecken lassen.

    Die Märkte der restlichen Euro-Zone verzeichneten zum Teil kräftig Gewinne. Und das ist die gute Nachricht für Europa. Griechenland scheint nicht länger so systemrelevant zu sein, dass es ganz Europa in die Tiefe ziehen kann – und das hat Konsequenzen.............http://www.welt.de/finanzen/boerse/article136803498/Die-Euro-Zone-hat-Griechenland-abgeschrieben.html
    26/1/15

    ReplyDelete

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