Greek Vote: Sign of Relief

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After the parliamentary elections, the political parties in Greece face again a complex political puzzle. Month after having failed to form a government the Greek political leaders will need to renegotiate for a coalition.

At the yesterday’s elections the Greek voters did not give convincing victory of any of the political parties. The center-right, pro-bailout and Pro-European ‘ New Democracy ‘ won 30, 37% of votes and will have 131 seats in the Parliament, followed by the radical left coalition SIRIZA with 26, 16% of votes, or 69 PMs; the Socialists of PASOC maintained their third position with 12, 72% support and with 33 parliamentary seats.

 “The Greek people voted for keeping European path and in support of its membership in the euro area,” said the leader of the “New Democracy” Antonis Samaras, who is most likely the next Prime Minister of the country. “No more risks, the place of Greece in Europe will not be will not be subject to doubt ‘ added Samaras.

The results of the parliamentary vote may enable the winning party to draw up a coalition Government, but the new government will certainly face strong opposition both in and outside Parliament.

The Socialists from PASOK are most likely the future partners of the winning “New Democracy”. If both parties agree to form a coalition together, they will have an absolute majority of 164 seats in the Hellenic Parliament of 300 members, elected for a four-year term. The radical Left Alliance Party (SİRİZA) most probably will refuse to participate or to support the possible coalition cabinet.

The German Chancellor Angela Merkel expressed the opinion that Greece will meet European commitments for reforms. According to the federal Minister of Finance Wolfgang Schäuble, the election results indicate that Greeks support the deep economic and fiscal reforms, which the country must make. The United Kingdom will work with the new Government in Greece, regardless of its composition, claimed the British Foreign Ministry.

The International Monetary Fund expressed willingness to “talk with the new Government” in his efforts to recover the economy of the country.

This is the second attempt of Greece political leaders to form a government. On the parliamentary elections in May 2012, Greece failed to reach an agreement for the establishment of a coalition government. After the elections in May no party gathered enough votes to form a government on its own. The attempts to form a coalition also collapsed and the county foundered in deep political and financial instability.

The financial markets also reacted positively to the latest political developments in Greece. The election results suggested the country will stay in the euro common currency, thus decreasing the risk of a major turmoil in financial markets and global economy. The single European currency increased its value against the dollar and the yen at the opening of Asian markets. “Even though the rally in risk may continue for a while, it is no time to get euphoric. The world economy is still in a bad shape and for Greece and others, formidable challenges still lay ahead,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

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About Nelly Naneva, LL.M, MBF

Nelly Naneva works as CEO of the Financial Institution Freetrade JSC and as Editor of Markets Weekly. She holds Masters' Degrees in Law and in Banking and Finance from Institute of Financial Services, School of Finance, London, Great Britain. She is an Expert author at EzineArticles and SelfGrowth, and among the 500 most-read authors for September 2012 on Yahoo.
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4 Responses

  1. I’m sure they will find a solution to the coalition this time. The majority is for the next bailouts and austerity so they just need to approve everything from the EU and live further.

  2. A coalition is a best option.

  3. It is very rare these days to find blogs that provide information someone is looking for. I am glad to see that your blog share valued information that can help to many readers. Thanks and keep writing!

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