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European Union, Greece

Worries about Greece’s immediate eurozone exit are extremely overblown

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Earlier this week, as the chances of a pro-bailout Greek coalition fell apart, you would think that the failure to cobble together a coalition was tantamount to Greece withdrawing from the euro and reintroducing the drachma.

Sure enough, signs of a “bank jog” emerged this week, as Greeks pulled out over €1.2 billion in deposits from Greek banks on Monday and Tuesday amid the political tumult.  An article in Der Spiegel declared that it is time for Greece to leave the euro and even Christine Lagarde, managing director of the International Monetary Fund said that, although it would be “quite messy,” it is time to start thinking about how to engineer a Greek exit from the euro.

But with an interim caretaker prime minister, Panagiotis Pikrammenos, being sworn in today, and new elections scheduled for just over a month from today, the warnings of Greece’s immediate exit from the eurozone are extremely overblown. Continue reading Worries about Greece’s immediate eurozone exit are extremely overblown →

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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.

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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.

Greece

Venizelos gets the mandate, but new elections still probable in Greece

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UPDATE, 2:45 pm ET: After Venizelos (left) met with Kouvelis (right) earlier today, it appears that Greece is a bit closer to forming a governing coalition, although it remains unclear to me which parties would join such a unity coalition:

“The moment of truth is approaching for everyone,” said Kouvelis, who has so far had a guarded approach to entering a unity government. “I propose the formation of an ecumenical government made up of trustworthy political figures that will reflect and respect the message from the elections.”

Kouvelis, whose appeal seemed to be directed at [SYRIZA] and New Democracy, added that this government should have a specific goal.

“This government’s mission, which will have a specific program and timeframe that will last until the European elections of 2014, will be twofold: Firstly, to keep the country in the European Union and euro and, secondly, to being the gradual disengagement from the [EU-IMF] memorandum.”

Kouvelis had previously indicated his willingness to join a SYRIZA-led coalition, and Venizelos will meet with Tsipras and Samaras on Friday.

Together, PASOK, SYRIZA and the Democratic Left would only command 119 seats, but a coalition of New Democracy, PASOK and the Democratic Left would command 168 seats.  Based on the past 72 hours, I cannot see any unity government that would bring together New Democracy and SYRIZA into the same government, so I think that any Kouvelis-endorsed coalition would include New Democracy and not SYRIZA.

Although Kouvelis has been touted as a potential prime minister, it is hard to see Samaras standing down as prime minister in favor of Kouvelis — it is New Democracy, after all, that would contribute 108 of the 168 seats in such a coalition.

One possibility, perhaps, is that Venizelos is willing to pull PASOK further away from its pro-bailout position and from its former caolition partner, New Democracy.  If the 33 seats from the center-right, but anti-bailout Independent Greeks are somehow in play: a PASOK-SYRIZA-Democratic Left-Independent Greeks coalition would carry 152 seats.

The supposed breakthrough comes as the first post-election poll shows that SYRIZA would win a second vote in June with 27.7% to just 20.3% for New Democracy and with PASOK languishing in third place at 12.6%.  With SYRIZA’s popularity climbing, Venizelos and Kouvelis know that it will come largely at the expense of their own parties, which may be driving them toward a coalition government, thereby avoiding new elections.

Stay tuned!

Continue reading Venizelos gets the mandate, but new elections still probable in Greece →

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Expect a Samaris / Tsipras showdown if Greece holds new June elections

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Alexis Tsipras, the leader of the leftist SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς) has not yet concluded that he cannot form a government, but it seems increasingly unlikely.  If he fails, Evangelos Venizelos, the former finance minister and leader of PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα) will yet have an opportunity to form a coalition.  If Venizelos fails, Greece’s leaders will have one last opportunity to form a ‘national unity’ government.

All things being equal, however, as neither the pro-bailout nor the anti-bailout forces seem to be able to summon enough strength to form a government, it certainly looks exceedingly likely that Greek voters will go to the polls again in June.

So who wins and who loses in the event of a second election? Continue reading Expect a Samaris / Tsipras showdown if Greece holds new June elections →

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Greek election results: Samaras and ND to have first chance to form government

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A day after an election that scrambled Greek — and potentially, European — politics, party leaders are surveying the new reality of Greek parliamentary politics in search of a workable governing coalition.

The center-right New Democracy (Νέα Δημοκρατία), which finished in first place, and which accordingly won the greatest number of seats in the Hellenic Parliament.  Under Greece’s new election law, 250 seats are distributed by proportional representation, while an additional 50 seats are awarded to the party with the highest support — even if, as in this election, the “winner” gets less than 19% of the total votes cast.

Nonetheless, even with its skewed number of seats, New Democracy is projected to hold just 108 seats, far below what it would need to form a government.   Accordingly, ND leader Antonis Samaras will have the first shot of forming a coalition — and will attempt today to build one among pro-euro and pro-bailout parties. Continue reading Greek election results: Samaras and ND to have first chance to form government →

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Greek election results: New Democracy leads, far-left SYRIZA in second, PASOK in third

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As French voters celebrate the election of a new president in leftist François Hollande, Greek voters returned a muddier verdict in its own election on Sunday, with returns that show the most fragmented Greek electorate in Greece’s postwar history, as voters have abandoned both of Greece’s two major parties, in a rebuke of the bailout that has resulted in savage budget cuts and a fiercely depressed economy.

As of 11 p.m. Greek time, with 40.53% of the votes tallied, the results are as follows:

The center-right New Democracy (Νέα Δημοκρατία) has won 20.29% of the vote, and will take an estimated 112 seats in the Hellenic parliament. New Democracy had been predicted to take the largest share of the vote, which results in an automatic “bonus” of 50 seats — the remaining 250 seats are apportioned to all parties (with over 3% support) on the basis of proportional representation.

The far-left SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς) has won 15.86% of the vote, and will take 49 seats.  SYRIZA has done better than expected, pushing the center-left PASOK (Panhellenic Socialist Movement — Πανελλήνιο Σοσιαλιστικό Κίνημα) into third place with just 13.98%, with a predicted 43 seats.

The anti-austerity center-right Independent Greeks, a splinter group from New Democracy, has won 10.37%, with predicted 32 seats.  KKE (the Greek Communist Party) has won 8.33%, with 25 predicted seats.  The fascist, nationalistic right Golden Dawn party has won 6.85% and will enter parliament with 21 seats, the first time it will be represented in parliament since 1974.

The far-left Democratic Left, itself a splinter group of SYRIZA, has won just 5.99% and is projected to win 18 seats.

With just 2.89%, the populist Orthodox LAOS appeared to have fallen short of the 3% threshold for representation in Greece’s parliament.  The same fate appeared to be in store for the Ecologist Greens, which took just 2.81%.

So what does all of this mean for Greece going forward? Continue reading Greek election results: New Democracy leads, far-left SYRIZA in second, PASOK in third →

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A guide to potential Greek coalitions (or, how we might end up with a second election)

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Although Greek elections have only this week been set for May 6, speculation is already rising that the vote will result in no viable coalition.

The two traditional parties of Greek politics since 1974 have been the center-right’s New Democracy (Νέα Δημοκρατία) and the center-left’s Panhellenic Socialist Movement (Πανελλήνιο Σοσιαλιστικό Κίνημα), or PASOK.  But polls leading up to the legislative elections, however, show that the Greek two-party system appears to have all but broken down in the face of voter disgust with both New Democracy and PASOK, which both supported the ‘troika’ bailout from the European Central Bank, the European Commission and the International Monetary Fund, along with the accompanying reforms and budget cuts, none of which has been popular among Greek voters, to put it mildly.

Polls also suggest that no single party commands much over 20% in support and accordingly, up to nine discrete political parties could enter the Hellenic Parliament after May 6.  That includes New Democracy and PASOK, but also KKE (the Greek Communist Party), SYRIZA (the Coalition of the Radical Left), the Democratic Left, the Ecologist Greens, the Independent Greeks (a center-right anti-austerity group), Golden Dawn (a neo-fascist, neo-nazi party) and LAOS (a right-wing Orthodox party) — the Greek electoral process provides that any party with over 3% of the national vote will be represented with seats.

But what are the potential combinations of coalitions?  And more to the point, what is the likelihood that any such coalition can come to agreement to form a government? Continue reading A guide to potential Greek coalitions (or, how we might end up with a second election) →

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Greek election date set for May 6

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We (finally) have a date for the Greek parliamentary elections: May 6.

Under the Greek election system, which will be conducted under a new 2007 electoral law, 250 of the 300 seats in the Hellenic Parliament will be awarded on the basis of proportional representation (only if the national tally exceeds 3% of the total vote, however).  The additional 50 seats will be awarded to the party that wins the leading number of votes.

Currently, the top two vote-winners in polls are Greece’s two longtime parties: New Democracy (Νέα Δημοκρατία), which has led most polls going into the vote with just over 20% of likely voters, and PASOK (the Panhellenic Socialist Movement, or Πανελλήνιο Σοσιαλιστικό Κίνημα), which polls anywhere from 12% to 16% under its new leader, former finance minister Evangelos Venizelos. 

Both PASOK and New Democracy support the current round of bailouts from the ‘troika’ of the European Central Bank, the European Commission and the International Monetary Fund, including regulatory reforms and controversial austerity measures that have led to widespread cuts in public spending, strong disapproval from the Greek electorate and have helped stall Greek GDP growth.  Together, PASOK and New Democracy approved the appointment of current prime minister Lucas Papademos, who succeeded former PASOK prime minister George Papandreou (who will nonetheless be standing for election on May 6 in Achaia). 

Accordingly, both PASOK and New Democracy are at near-record levels of unpopularity heading into the May 6 election.

The latest poll from Public Issue, however, shows New Democracy with just 19% support and PASOK with 14.5%, which is too little to form a coalition — any party (or parties) need to win between 36% and 39% of the total vote to command enough seats to govern.  Taken together, the 33.5% represents the lowest total of the two of any poll to date.

Nonetheless, at least four anti-bailout parties have also emerged with anywhere between 8% and 12% of the vote, making it likely that both ND and PASOK will receive traditionally lower support than ever.  The KKE, Greece’s longtime Communist Party, wins 11%, SYRIZA, a coalition of the Radical Left no longer associated with the KKE, wins 13%, DIMAR — the “Democratic Left,” a splinter group from SYRIZA, wins 12%.  Meanwhile, the Independent Greeks, an anti-austerity group that splintered from New Democracy, also wins 11%.  The neo-fascist Golden Dawn polled 5% and each of the Ecologist Greens and the right-wing Popular Orthodox Rally polled 3%.

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What will happen in this spring’s Greek elections?

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Evangelos Venizelos, formerly the beleaguered finance minister of what remains of the Greek government, fresh off a negotiation of Greece’s second bailout (including an orderly debt writedown deal with private creditors), won the uncontested leadership of Greece’s main center-left party Sunday, in advance of legislative elections expected to occur in late April or early May.

Although he had only served as finance minister since June 2011, Venizelos quickly became battle-tested in having faced down the “troika” of the International Monetary Fund, the European Commission and the European Central Bank.  If you can negotiate against Angela Merkel, Christine Lagarde and who-knows-how-many creditors, and you can emerge with Greece remaining intact, however delicately, perhaps you have a decent shot are rehabilitating the Panhellenic Socialist Movement (Πανελλήνιο Σοσιαλιστικό Κίνημα), or “PASOK” (ΠΑΣΟΚ in Greek).

But if Greece’s economy is in shambles, its politics are perhaps in even worse shape — no one thinks Venizelos’s new job will be any easier.

A new poll today shows PASOK with just 12.5% support (down from the 44% it received in the 2009 elections), and Greece’s center-right New Democracy party (Νέα Δημοκρατία) with just 22.5% support (down from 33.5% that it received in the 2009 elections).

Former minister of culture Antonis Samaris will lead New Democracy into the election, which will be only the second Greek election that neither a Papandreou nor a Karamanlis will lead one of the major parties, at least since Greece returned to democracy in 1974.

Continue reading What will happen in this spring’s Greek elections? →