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Greece

Tsipras predicts Greek debt haircut after German elections

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The great thing about Washington, D.C. is the flow of visitors we see from throughout the world and the relative access to top officials through top-notch organizations such as the Brookings Institution, which hosted Greek opposition leader Alexis Tsipras for a 90-minute session Tuesday.Greece Flag Icon

The beleaguered Greek economy has receded from headlines somewhat since the razor-close election in June 2012 (itself a rerun of an earlier inconclusive vote in May 2012) and since the conclusion of the latest agreement, reached in October 2012, between Greece’s government and the ‘troika’ of the International Monetary Fund, the European Commission and the European Central Bank for the disbursement of cash to the nearly bankrupt Greek government in exchange for €13.5 billion in budget cuts.

Tsipras leads SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς), which finished a very narrow second place to the center-right New Democracy (Νέα Δημοκρατία), whose leader Antonis Samaras, now prime minister, leads a broad pro-bailout coalition.  Although SYRIZA lost the election, it’s the largest anti-austerity force in Greece, and it either leads or ties New Democracy in most polls.

Given that Greece’s unemployment rate keeps increasing (it’s currently around 27%) and it’s entering its sixth consecutive year of economic contraction, even as the government’s been forced into adopting increasingly harsh austerity measures, it’s hard not to see Tsipras as a future prime minister.

Tsipras, who’s made several international trips since last June, has been on somewhat of a campaign to convince the world that he’s not a crazy socialist to be feared, but rather well-placed within the Keynesian macroeconomic tradition of the social democratic left, whose European leaders believe that austerity alone cannot deliver the kind of boost to the economy that will result in greater GDP growth and more employment.   Continue reading Tsipras predicts Greek debt haircut after German elections →

Greece

Greek government, troika reach agreement on Greek bailout

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It seems all but done — Greece’s government and the ‘troika’ of the International Monetary Fund, the European Central Bank and the European Commission have reached an agreement on the latest disbursement of funds that Greece needs to finance government operations, in exchange for a series of budget cuts and labor market reforms. 

In an additional twist, there are quasi-official reports from both Germany and Greece that the bailout program will be extended from the end of 2014 to the end of 2016, which will give Greece until at least 2016 to whittle down its budget deficit to the 3% required under EU rules, though it seems unlikely that Greece’s budget will be anywhere near to closing in on that target by even 2016.

The details are essentially as described over the past four months — €13.5 billion in budget cuts over the next two years, €9 billion of which will take effect in 2013.  The bottom line for Greek finances is that a Greek exit from the eurozone, which seemed virtually inevitable through much of 2012, has now been delayed, and delayed for a significant amount of time (Citi, for example, lowered its odds of a ‘Grexit’ to 60%, and predict it could still happen, but only in the first half of 2014).

That’s a significant victory for Greece’s prime minister, in office for barely four months, Antonis Samaris (pictured above, right, with Euro Group president and Luxembourg prime minister Jean–Claude Juncker), and it will now give him some breathing space to turn to Greece’s economic depression.

For me, there are three notable political aspects to the deal worth noting:  Continue reading Greek government, troika reach agreement on Greek bailout →

Germany, Greece

Samaras ‘negotiations’ with Berlin not going so swell

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It didn’t go so well for Greek prime minister Antonis Samaras on his visits with European Union leaders in Berlin.  His plea for more time to come up with cuts to the Greek budget is being met with stony nonchalance from both German chancellor Angela Merkel (pictured above right, with Samaras) and French president François Hollande, to say nothing of German civil society.

Samaras has requested an additional two years to come up with an additional €11.5 billion in cuts to the Greek budget.  While Merkel — and especially Hollande — were sympathetic to Samaras’s plea and reiterated their support for Greece to remain in the eurozone, Samaras will return to Athens having won no concessions from Berlin or Paris.

Business daily Handelsblatt writes:

“Greek Prime Minister Antonis Samaras does not tire of making new demands. Now he wants more time, for the health of his economy. Not more money, only more time — at least according to his requests to Berlin and Brussels. And, in Berlin and Brussels, there will be much discussion about whether Greece should be granted more time.”

“Our instinctive reaction regarding Samaras’ request is, well, that could be something. Given the near 40 degree Celsius (104 degrees Fahrenheit) temperatures that Germany experienced last weekend, we can empathize with Greek lethargy.”

“But is the Greek prime minister right? Is time instead of money really better? I say no.”

“We have known for a long time that time is money. Perhaps Angela Merkel will also say that to the Greeks. Despite the hot and sweaty 40-degree temperatures, there will be no more days off.”

Athens News reports that Merkel’s comments at a joint press conference with Samaras Friday were particularly tense:

“We expect Greece to deliver all that has been promised,” Merkel declared. In remarks that were unusually sharp for a joint news conference, she stressed that Berlin has heard words in the past but now expects deeds.

The tough talk contrasted sharply with the head of state honours and diplomatic smiles with which Samaras was received on his first official visit, complete with red carpet and band.

Merkel said that Samaras’ visit is a sign of the “very close ties” between the two countries, only to add later that each side had lost credibility in the eyes of the other and that trust must be regained.

And these are demands from someone who ‘Europe’ was desperate to win June’s Greek parliamentary elections.

Can you imagine how horrific the reaction would have been if the request had come from Alexis Tsipras, the leader of SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς)?

Merkel spent Sunday trying to calm the waters against anti-Greek feeling in Germany, after German Bundesbank president Jens Weidmann attacked the European Central Bank’s buying of state debt, and Alexander Dobrindt, general secretary of the governing Christlich-Soziale Union (Christian Social Union), the Bavarian conservative party and sister party of Merkel’s own Christlich Demokratische Union (Christian Democratic Union), speculated that Greece would leave the single currency by next year.

Greece

How many days (weeks) away are we from another Greek solvency crisis?

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When the world last left Greece, it was breathing a sigh of relief upon the news that Antonis Samaras would be able to cobble together a coalition following a narrow win in the June elections — the second such election in as many months.

Samaras (pictured above), now a little over six weeks into his government, is finding it increasingly difficult to get his coalition to agree on €11.5 billion in cuts, required by Greece’s bailout from the European Central Bank, the European Commission and the International Monetary Fund.  Those entities, known as the ‘troika,’ have pushed off a long-delayed review of Greece’s bailout program from September to October, but that means only that Greece’s government will have until mid-September to make the cuts. The ‘troika’ will then make a decision about disbursing the next €31 billion tranche of bailout funds to Greece, and Greece will then try to push for a renegotiation of the bailout terms to lighten the austerity that has added pressure to Greece’s downward economic spiral.

It’s clear that the ‘troika’ is getting impatient: the IMF has started to balk at throwing more money at Greece, has called on the European Union to take the lead on any further bailouts and the ECB in late July stopped accepting Greek bonds as collateral altogether.

But the Greek economy is in shambles, and is expected to contract by a full 7% this year — much more than an original forecast of 4.7%.  Greece’s recession is only getting worse, not better, and that’s after the economy contracted almost 14% in the past four years.  As tax receipts correspondingly shrink, Greece’s debt sinkhole becomes ever larger.  Greater debt requires more austerity, which cripples the economy, which leads to greater debt, and so on.

The only solutions seem to be:

  1. a miraculous economic turnaround. Not likely anytime soon.
  2. a full bailout from the European Union. Whether that means a direct cash bailout or “eurobonds” or a more inflationary ECB monetary policy, it all boils down to a transfer of wealth from Germany to Greece  — it’s an option that German chancellor Angela Merkel has resisted and which has become increasingly unpopular in domestic German politics.
  3. the “Grexit”. Greece leaves the eurozone, adopts a new drachma, and devalues it until its debts are manageable and its exports are cheap.  But that could lead to snowballing worries about Spain, Portugal, Italy and the rest of the eurozone and precipitate Europe’s own “Lehman” moment of financial panic.

The next deadline is August 20, when Greece must pay a €3 billion maturing to the ECB — and the ECB (despite its edict that it will no longer accept Greek bonds as collateral) is weighing the option of lending money directly to the Greek central bank (which can accept Greek bonds as collateral), so that Greece in turn can pay back the debt it owes to the ECB.

It’s a tidy Alice-in-Wonderland arrangement in which only a central banker could delight.

ECB president Mario Draghi deserves credit for getting Greece past yet another hurdle, but it doesn’t inspire any long-term confidence in either Europe or Greece to get the country out of its nosedive.  It takes little imagination to see how Greece could bumble out of the eurozone in short order without further intervention if and when it runs out of cash (which could now still happen in September): Greece would then be forced to pay its employees and pensioners in IOUs (think of the kind of IOUs that California issued — registered warrants — when it fell short of cash reserves in 2009), Greece would take longer and longer to pay back the IOUs, individual Greeks would start trading the IOUs for euros, and a market would develop that sets a price for the IOUs in euros.

In time, the IOUs will have become de-facto drachmas.

Meanwhile, the coalition that everyone thought would easily come to an agreement on those additional budget cuts has stalled. Continue reading How many days (weeks) away are we from another Greek solvency crisis? →

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Samaras pieces together coalition after ND places first in Greek election

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The rest of the eurozone — indeed, the rest of the world — may have breathed a sigh of relief Sunday when it turned out that the pro-bailout parties appeared likely to secure a majority of the seats in the second of two highly divisive parliamentary elections in Greece.

As shown above, New Democracy (Νέα Δημοκρατία) has won the largest share of votes, taking with it the 50-seat “bonus” in the Hellenic parliament.  It is now very likely to form a coalition with the pro-bailout PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα), and possibly even with the Democratic Left (Δημοκρατική Αριστερά), according to reports of the latest coalition talks.  New Democracy’s leader Antonis will likely be Greece’s new prime minister, with the only question being whether PASOK and Democratic Left figures will take positions in the government or merely provide support to the coalition.

Samaras is allegedly favoring the appointment of Vassilis Rapanos, the president of National Bank, as finance minister.

Athens News has a full blog of Tuesday’s coalition talk developments.

In the meanwhile, here’s a look at where each of the main political actors stand in the fallout of Sunday’s vote, looking onward to what should still be a hot, wearisome summer for Greece and its position in the eurozone: Continue reading Samaras pieces together coalition after ND places first in Greek election →

Greece

Initial Greek election results point to win for New Democracy

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With just over 50% of results in, it appears that New Democracy will win today’s election in Greece.

If the results (set forth below) remain consistent as votes are counted, it will mark a result fairly consistent with the result in the May election, with more voters, however, shifting to the two main contestants — New Democracy and SYRIZA definitely have shaved off votes from the other parties.

PASOK will have done a little worse, having been crushed by the pro-bailout New Democracy from its right and by SYRIZA’s stridently anti-bailout position to its left, but will likely join a coalition with New Democracy.

I wonder if New Democracy’s alliance in the second round with the Democratic Alliance will have made a crucial difference — a small centrist/liberal party founded by a former member of New Democracy (Dora Bakoyannis), who was expelled from New Democracy in 2010.  The party won just around 2.5% in the first round of the election, and the formal alliance this time around may well mark the difference between New Democracy and SYRIZA.

It will be a disappointment for the mainstream parties that Golden Dawn appears to have done no worse or no better from the first round — the mainstream parties will now have to find a way to live with a blatantly neo-fascist party in the Hellenic parliament and to confront the reasons why 7% of the Greek electorate emphatically support a party that has espoused neo-nazi views.

Outside of Greece, New Democracy’s win will likely be taken by the European Union and the international community as a good sign — a sign that Greece is fully committed to remaining in the eurozone and to the austerity program that is a condition of the country’s two bailouts.  But it remains nearly certain that Antonis Samaras, the leader of New Democracy and likely Greece’s next prime minister, will engage in negotiations with the European Commission, the European Central Bank and the International Monetary Fund to ease the austerity in Greece or to achieve some sort of aid package to help get Greece’s economy growing again.

While New Democracy’s election won’t necessarily prevent Greece’s exit from the eurozone, it does not seem likely that Monday will mark a “Lehman” moment, where doubts about Greece could spur a bank run throughout the troubled economies of the European Union, as could have been the case in the event of a SYRIZA win.

And for SYRIZA itself? We have not seen the last of its brash, young leader in Alexis Tsipras, who will now be the main opposition figure.  In doing so well in the May election, Tsipras forced the two main parties, but especially New Democracy, into acknowledging the real pain that austerity has inflicted throughout Greek civil society and moving toward SYRIZA’s position that the terms of the bailout must be renegotiated.  In opposition, Tsipras will have no responsibility for the difficult decisions that Greece’s new government will inevitably have to take, and he will have an opportunity to enshrine SYRIZA more permanently as the mainstream leftist party in Greece — perhaps with a merger of the Democratic Left (a slightly more moderate party that itself split in 2010 from SYRIZA), and by continuing to poach away voter support from PASOK and from the KKE (the Communists).

The first key will be to see what post Evangelos Venizelos, PASOK’s leader, receives in an New Democracy-PASOK government — it seems very likely that the one-time finance minister, much respected in that role throughout the past year, will now once again be finance minister.  If so, however, he will struggle in his role as PASOK’s leader to define PASOK’s ongoing role in Greek politics, especially with SYRIZA resurgent on its left.  As the minor partner in a conservative, pro-austerity government, Greece’s longtime socialist party seems to have a precarious future.

* * * *

New Democracy (center-right party): 30.24% with a projected 130 seats.

SYRIZA (radical left anti-bailout party):  26.30%with 70 seats.

PASOK (traditional party of Greece’s left, but “pro-bailout” party): 12.69% with 34 seats.

Independent Greeks (anti-bailout right-wing party): 7.45% with 20 seats.

Golden Dawn (neo-fascist party): 6.94% with 18 seats.

Democratic Left (another leftist anti-bailout party): 6.07% with 16 seats.

KKE (Greece’s communist party): 4.43% with 12 seats.

 

Egypt, France, Greece

Big weekend for France, Greece and Egypt

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It’s another big weekend for elections!

Voters in Egypt go to the polls today and tomorrow to choose a president in the final runoff between the Muslim brotherhood’s Mohammed Morsi and Ahmed Shafiq, a former Air Force commander and the final prime minister of former president Hosni Mubarak, in what is seen as a Hobson’s choice between Islamism and the military. Since the Supreme Constitutional Court disbanded the parliament, and Egypt hasn’t even written a new constitution, though, we have no idea whether the new president has real power or will be a figurehead!

Read Suffragio’s coverage of the Egyptian election here.

Voters in France go to the polls for the second time in two weeks for the second round of parliamentary elections, which are expected to confirm a governing majority for newly elected Parti socialiste president François Hollande.  One open question is whether Hollande’s party (and their allies) will win the 289 seats necessary to govern without forming a coalition with the greens and/or communists.  Controversial individual contests also see Hollande’s former partner Ségolène Royal, far-right Front national leader Marine Le Pen and centrist François Bayrou fighting hard for seats in France’s national assembly.

Read Suffragio’s coverage of the French elections here.

Finally, voters return to the polls in Greece after no party emerged in May elections with enough support to form a governing coalition.  Far-left SYRIZA, led by the brash, youthful Alexis Tsipras, is expected to vie with center-right New Democracy for the lead in what will still likely be a fragmented result.  Most of the Hellenic parliament’s seats are awarded on the basis of proportional representation for all parties that receive over 3% of the vote, while the top party receives a ‘bonus’ of 50 seats.  The leading party seems likely to form a governing coalition.

Read Suffragio’s coverage of the Greek elections here.

Greece

Post-‘Spailout’ climate pulls Samaras even closer to SYRIZA’s position

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As the second Greek legislative campaign in as many months winds down for Sunday’s vote, it is becoming difficult to spot the difference between the leaders of the two parties most likely to win.

Oh what a difference a month can make.

Antonis Samaras, leader of the center-right New Democracy (Νέα Δημοκρατία), has been moving toward a “renegotiation” position for some time, but his latest comments about a potential renegotiation of Greece’s bailout terms today vary astonishingly little from what Alexis Tsipras, leader of the leftist SYRIZA, the Coalition of the Radical Left (Συνασπισμός Ριζοσπαστικής Αριστεράς), has been arguing all along:

Overhauling Greece’s debt deal, known as the memorandum, was also at the top of his party’s agenda, he said. “We will change the memorandum, the relentless recession cannot go on.”

He indicated that European leaders were open to renegotiating Greece’s debt deal. “Europe is changing, Greece has a chance for a fair negotiation within this climate of change,” he said.

Samaras said ND had set two conditions for joining other parties in a coalition government: securing Greece’s position in the eurozone and modifying the memorandum.

It’s a staggering evolution by Samaras, even since May.  Regardless of whether SYRIZA wins on June 17, it has cleared moved the terms of Greece’s national debate.

Meanwhile, read Tsipras’s op-ed in The Financial Times from yesterday — he sounds much more like Samaras than the marching-in-the-streets radical of the first election campaign (indeed, the idea of Tsipras writing an op-ed in The Financial Times back in April would itself have been risible).  It’s clear that, with even-or-so odds of becoming Greece’s next prime minister, Tsipras is looking to project an image of sober competence:

The systemic fiscal problems of Greece are, in large part, a problem of low public revenues.  Myriad tax concessions and exemptions granted to special interests by previous administrations, along with a low effective tax rate on personal income as well as capital, explain much of the problem. So too does the highly ineffective method of tax collection. Continue reading Post-‘Spailout’ climate pulls Samaras even closer to SYRIZA’s position →

Greece

Golden Dawn incident highlights possibility of neo-fascist decline in Greek election re-run

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There aren’t many silver linings in being forced to hold two legislative elections in as many months, while your country is running out of money, mired in near-depression economic conditions and suffering from budget cuts that have torn apart the country’s social contract.

But perhaps one of the best things that can come of the June 17 elections — regardless of whether the pro-bailout center-right New Democracy or the anti-bailout radical left SYRIZA wins — is the chance that the neo-fascist Golden Dawn party will fare significantly poorer this time around.

Among other things, reduced support for Golden Dawn would significantly facilitate the arithmetic of forming a government.

The high-profile implosion of the party’s spokesperson Ilias Kasidiaris — an arrest warrant was issued for Kasidiaris after he threw water at one female parliamentary candidate yesterday and repeated slapped another on a live television talk show — does not bode well for the party’s chances:

The exchanges came when the discussion turned to the sensitive topic of the Greek Civil War (1946-1949).
When Kasidiaris called [Communist MP Liana] Kanelli an “old Commie”, she retorted that he was a “fascist”.  Kasidiaris also was incensed that SYRIZA’s Rena Dourou mentioned a pending court case against him.
When Dourou said that there was a “crisis of democracy when people who will take the country back 500 years have got into the parliament”, Kasidiaris, who has served in the army’s special forces, picked up a glass of water and hurled its contents at her.
“You joke,” he shouted.
He then turned on Kanelli, who had got up out of her chair and appeared to throw a newspaper at him.
He slapped Kanelli three times on the side of the face.

The Kasidiaris distraction follows a ridiculous post-election press conference in May when Nikolaos Mihaloliakos, the party’s leader, launched into a neo-nazi screed after the party’s thugs tried to force journalists to stand at attention.

Golden Dawn thrives on these confrontational moments to attract attention.  But even if you think that these kinds of outbursts are deliberate, it’s a sign of Golden Dawn’s weakness that it is staging these moments to suck away media attention from the main parties just 10 days before the election.

In the May elections, Golden Dawn won 6.97% of the vote and 21 seats.  Parties will win seats in the parliament, on the basis of proportional representation, if they can draw more than 3% of the vote. Continue reading Golden Dawn incident highlights possibility of neo-fascist decline in Greek election re-run →

Greece

Tsipras outlines SYRIZA program, as Samaras shifts tone toward bailout renegotiation

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Alexis Tsipras laid out his party’s program for the upcoming June 17 Greek election on Friday.

Tsipras said a SYRIZA government would immediately reject the memorandum on coming to power and ask for Greece’s debt to be restructured or for a moratorium on repayments. It would then repeal a reduction to the minimum wage and extend unemployment benefit to two years. It would also repeal recent labor market reforms limiting collective contracts.

Tsipras set out how his government would stabilize the economy. He said public spending would be set at between 43 and 46 percent of GDP, rather than under 36 percent as agreed in the memorandum. The SYRIZA leader said he would raise revenues by cutting down on tax evasion, waste and corruption and forming an assets register for all Greeks at home and abroad. The wealthy would pay more under a new tax system, he said.

The key takeaway point is that it is not substantively different from the program under which he led SYRIZA, the Coalition of the Radical Left (Συνασπισμός Ριζοσπαστικής Αριστεράς) in the previous May elections.

It does, however, highlight a subtle but unmistakable shift in the tone of Tsipras’s main rival, Antonis Samaras, the leader of New Democracy (Νέα Δημοκρατία), the center-right pro-bailout party that finished first in the May election.  Samaras in recent days has increasingly been taking a softer line on renegotiating Greece’s austerity program with the European Commission, the European Central Bank and the International Monetary Fund, all of which granted two bailouts to Greece in exchange for its adoption of austerity measures and labor market reforms.

Although Samaras has raged throughout both campaigns that a SYRIZA win would be catastrophic and lead to Greece’s exit from the eurozone, it’s clear that in the second campaign, ND and the pro-bailout PASOK (Panhellenic Socialist Movement — Πανελλήνιο Σοσιαλιστικό Κίνημα) are moving toward SYRIZA’s position.   Continue reading Tsipras outlines SYRIZA program, as Samaras shifts tone toward bailout renegotiation →

Greece

ND regains polling momentum against SYRIZA in upcoming Greek election

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As predicted, the upcoming (second) Greek election is increasingly looking like a showdown between the two key figures of the pro-bailout and anti-austerity camps — between Antonis Samaras, the leader of the center-right New Democracy (Νέα Δημοκρατία) and Alexis Tsipras, the leader of the leftist SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς).

Polls show that New Democracy may be regaining momentum against SYRIZA, which had jumped into the lead in polls following the election and during the coalition talks that failed to produce a viable government.  Each of the two parties can point to polls showing a lead, with nearly a month to go until Greeks return to the polls.  Both parties are polling over 20% after an election in which no single party won over one-fifth of a historically fragmented electorate.

Both leaders are already sniping at one another in advance of June 17 elections, the second in two months in Greece, amid global concern that the possibility of an anti-bailout government’s election could lead to Greece’s exit from the eurozone (with a fear that the process of ‘de-euroization’ has already begun and could well accelerate — capital flowing out of not just Greek banks, but banks in Spain, Portugal and Italy as well).

Tsipras on Tuesday was in Berlin, after a visit to Paris on Monday with popular leftist leader Jean-Luc Mélenchon (pictured above), with the dual goals of calming fears about a potential SYRIZA-led government (Tsipras does not want Greece to leave the eurozone, but would like to renegotiate the terms of Greece’s bailout and austerity measures, four years into a devastating recession) and also building common cause with European leftists.  Tsipras has couched his electoral success in terms of a wider turn across Europe from austerity towards a more growth-oriented policy, as evidenced by the election of leftist anti-austerity François Hollande in France:

“Greece is a link in a chain. If it breaks it is not just the link that is broken but the whole chain. What people have to understand is that the Greek crisis concerns not just Greece but all European people so a common European solution has to be found,” Tsipras told reporters. Continue reading ND regains polling momentum against SYRIZA in upcoming Greek election →

Greece

Tsipras: Austerity will send us ‘directly to the hell’

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It was somewhat of a coup for Christiane Amanpour to get an interview in English with SYRIZA leader Alexis Tsipras.

With new elections scheduled in Greece for June 17 and with the radical left SYRIZA leading and/or tied with the center-right New Democracy for first place, Tsipras has become the face of Greece’s anti-austerity front.

Even in English, you can understand how his brazen charm and direct message — he has refused to accept the harsh budget cuts demanded in exchange for Greece’s bailout — has made him one of the most popular politician in Greece.

But I don’t think he did his cause any favors here — it’s mostly his limited command of English, I suppose, but he came across more as a Greek communist Balki Bartokomous* than as a mature leader ready to reassure the European Central Bank, the European Commission, Angel Merkel, Christine Lagarde or, frankly, even the Greek people. Continue reading Tsipras: Austerity will send us ‘directly to the hell’ →

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New Greek elections imminent amid alarm over potential euro exit

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With each of the top three leaders exhausting their mandate to form a government following the May 6 Greek elections, and with Greek president Karolos Papoulias failing in his attempt to bring party leaders together to form a caretaker, technocratic government of non-political leaders, Greece will head to the polls again in June, as concern swept the eurozone that Greece’s exit from the single currency might be imminent.

The election will pit center-right New Democracy (Νέα Δημοκρατία) and center-left PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα) against SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς)  and a stable of various anti-austerity parties on both the left and the right.  In the prior May 6 election, ND won 18.85% of the vote and 108 seats in the Greek parliament; SYRIZA finished a strong second with 16.78% and 52 seats, besting PASOK at 13.18% and 41 seats. PASOK had won the previous 2009 elections and had joined in a unity coalition in November 2011 alongside ND to support Greece’s bailout and accompanying budget cuts.

The battle for first place — under Greek election law, the first-place winner takes an automatic bonus of 50 seats in the Hellenic parliament, while the remaining 250 seats are distributed proportionally among all parties achieving over 3% support — will be between New Democracy and SYRIZA, however, and their leaders were quick to point fingers at one another Tuesday for the breakdown over a potential government. Continue reading New Greek elections imminent amid alarm over potential euro exit →

Greece

June Greek elections now almost certain

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Here’s your Monday update on the Greek coalition talks.

All three of the top party leaders have been unable to form a government, and President Karolos Papoulias, over the weekend, has been unable to bring the top leaders together to join a unity government.

New elections, likely to be held June 17, are now all but certain:

Greece’s biggest anti-bailout party, SYRIZA, defied overtures to join the government Sunday, deepening the impasse. Leader Alexis Tsipras won’t attend a new meeting called by Papoulias Monday for 7:30 p.m., state-run NET TV reported, without saying how it got the information.

“SYRIZA won’t betray the Greek people,” Tsipras said in statements televised on NET TV after the meeting with Papoulias and the leaders of the New Democracy and PASOK parties. “We are being asked to agree to the destruction of Greek society.”

Papoulias spent the day trying to coax the country’s three biggest parties into a coalition after a week of talks failed to deliver on mandates to form a government. If Papoulias’s efforts fail, new elections will need to be called. Monday’s meeting will be with the leaders of two of the three biggest parties, and the head of the smaller Democratic Left party, NET said.

Greece’s political impasse since the inconclusive May 6 election has raised the possibility another vote will have to be held as early as next month, with polls showing that could boost anti-bailout SYRIZA to the top spot. The standoff has reignited concern the country will renege on pledges to cut spending as required by the terms of its two bailouts negotiated since May 2010, and, ultimately, leave the euro area.

Greece

Kouvelis refuses to join unity Greek government without SYRIZA; Samaras attacks Tsipras

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So the latest in the Greek drama over forming a coalition government is vaguely predictable.

Yesterday’s signs of an early breakthrough between PASOK (under the leadership of Evangelos Venizelos) and the Democratic Left (under the leadership of Fotis Kouvelis) crumbled today after it became clear that Kouvelis’s idea of a unity government must include the more radical SYRIZA (under the leadership of Alexis Tsipras).

Any unity government would also have to feature New Democracy (under the leadership of Antonis Samaras), which, as the top vote-winner in Sunday’s election, will hold 108 seats in the Hellenic parliament.

But as I noted yesterday, New Democracy and SYRIZA are simply too far apart in their approaches to the bailout in order to form any viable coalition.

Indeed, if any broad pro-bailout coalition were possible, Samaras would have likely formed it when he had the first opportunity to form a government earlier this week.  If any broad anti-austerity coalition were possible, Tsipras, whose SYRIZA finished a strong second in Sunday’s election would have likely formed it as well.

Meanwhile, Samaras has attacked Tsipras and SYRIZA in a lively forecast of the right’s attack in any future election campaign.  With Sunday’s election behind us, the battle lines are clearly drawn, and a new election will be a clearer showdown between the Samaras view and the Tsipras view — Samaras will run as the champion of austerity, arguing that it’s the only way to guarantee Greece’s continued membership in the eurozone; Tsipras will run as the champion of renegotiating Greece’s position, arguing that the current deal is strangling any chance of economic growth in Greece.

If the talks crumble, as expected, Greece’s president will bring together the top party leaders for one last attempt to implore a national unity government; if that fails, the next option will be new elections in June — polls show that new elections would find Tsipras’s hand strengthen and the anti-austerity left in a much clearer position to form a government.