Greece Elections Update

Here's the short summary of the news of the past couple of weeks in Greece, followed by Bloomberg reports news trails:
  • The main historical parties have lost their majority and extremes, anti-bailout parties, have taken the lead in Greece.
  • Greece is likely to leave the Euro as early as next month.
  • The IMF and the EU are unwilling to re-negociate the bailout terms, while they are the weeks at the mercy of Greece, which as the creditors has all the power. So both the IMF and the EU are either complete fools, or are just bluffing.
  • Greece Euro-Exit debate goes public
  • Greece Elections trigger an outflow of deposits
  • Greece will try to stay in the Euro but disengage from the bailout measures — For how long will they try, before giving up again, as it's simply NOT POSSIBLE for them to stay in the Euro, and remain solvent without defaulting?
(Bloomberg) May 4, 2012 — Voting in Greece’s May 6 general elections begins at 7 a.m. and finishes at 7 p.m. Athens time. A total of 9.85 million citizens, including 360,000 new voters, are eligible to vote at one of the 20,560 polling stations around the country.

(Bloomberg) May 6, 2012 — Greek voters flocked to anti-bailout parties, projections showed, throwing doubt on whether the two main parties can put together a government strong enough to implement spending cuts to ensure the flow of bailout funds.

New Democracy led in the election today with 18.9 percent of the vote, according to projections based on partially counted ballots on state-run NET TV. Pro-bailout socialist Pasok got 13.4 percent. On the other side of the debate, anti-bailout party Syriza got 16.6 percent and Independent Greeks got 10.5 percent. Based on those figures, Pasok and New Democracy would fall one short of the 151 seats needed to win a majority.
(Bloomberg) May 6, 2012 — Alexis Tsipras, the head of Syriza, which elections today showed could be Greece’s second-biggest party, said the Greek people had given him a mandate to do whatever he can to cancel the bailout agreement with the European Union and International Monetary Fund.

The result today shows that Greeks, and Europeans, want “to cancel the memorandum of barbarity,” Tsipras said in statements televised in Athens on state-run NET TV. He said he would begin talks with parties of the Greek left tomorrow to achieve that goal.

(Bloomberg) May 6, 2012 — Alexis Tsipras became the surprise package of the Greek election by telling Angela Merkel to get lost.

“The people of Europe can no longer be reconciled with the bailouts of barbarism,” Tsipras, 37, said on state-run NET TV late yesterday after his Syriza party unexpectedly came second in the country’s election. “European leaders, and especially Ms. Merkel, should realize that her policies have undergone a crushing defeat.”

Tsipras’s calls to tax the rich, delay debt repayments and cut defense spending struck a chord with voters angry at austerity measures imposed by the European Union and the International Monetary Fund in return for bailouts. [...]

The result put Syriza ahead of the Socialist Pasok party, potentially derailing efforts to implement the terms of the country’s financial lifeline. Syriza, which means Coalition of the Radical Left, won 16 percent of the vote, projections showed. That exceeded the 13 percent won by Pasok, one of the two pillars of the political establishment since 1974. New Democracy, led by Antonis Samaras, topped the poll with 20 percent.

The result, the best since the party was founded in 2004, puts Tsipras in a position to try and form a government should New Democracy fail to put a coalition together in the first round of talks.

(Bloomberg) May 7, 2012 — Greek stocks tumbled the most in six months after the country’s two main political parties failed to achieve a combined majority in yesterday’s election as voters flocked to anti-austerity parties.

Syriza leader Alexis Tsipras said today his party will honor its election pledge to overturn austerity policies, rejecting an overture to join a national salvation government with New Democracy.
Venizelos Proposal

(Bloomberg) May 8, 2012 — Greece’s Syriza party leader Alexis Tsipras, charged with forming a government, told his pro-bailout counterparts they must renounce support for the European Union- led rescue if there is to be any chance of forging a coalition.

Tsipras said he expected Antonis Samaras of New Democracy and Evangelos Venizelos, the former finance minister who leads the Pasok party, to send a letter to the EU revoking their pledges to implement austerity measures by the time he meets with them tomorrow to discuss forming a coalition. Samaras said he would not do so, and would support a minority government if necessary.

The bailout parties no longer have a majority in parliament to vote for measures that plunder the country,” Tsipras told reporters in Athenst oday after receiving the coalition-building mandate from President Karolos Papoulias. “There will be no 11 billion euros ($14 billion) of additional austerity measures; 150,000 jobs will not be cut.”

Political wrangling after the inconclusive May 6 election has reignited European concerns over Greece’s ability to hold to the terms of a second, 130 billion-euro rescue. Parliament is split down the middle on the two bailout deals negotiated since May 2010, as the country at the epicenter of the debt crisis again risks exit from the euro.

(Bloomberg) May 8, 2012 — Greece will probably leave the euro as soon as next month as the government runs out of cash and European institutions fail to lend more to the nation, according to John Taylor of hedge fund FX Concepts LLC.

This summer I think is very likely,” Taylor, founder and chief executive officer of FX Concepts in New York, said today in an interview on Bloomberg Television’s “Inside Track” with Erik Schatzker and Sara Eisen. “The Europeans aren’t going to give them the money, the International Monetary Fund’s not going to give them an OK. They will be out of money in June.”

(Bloomberg) May 9, 2012 — Swedish Finance Minister Anders Borg said Greece won’t be able to ease terms of its international loan package as the euro area’s most indebted nation faces the prospect of a government led by anti-bailout politicians.

“It will be very difficult to backtrack in the International Monetary Fund program,” Borg, whose country stands outside the euro, said in Stockholm today. “It’s not acceptable to lower demands.”

(Bloomberg) May 9, 2012 — From the monetary fortress of the European Central Bank to the pro-European duchy of Luxembourg, policy makers are beginning to air their doubts that Greece can stay in the euro.

Post-election tumult in Athens has put the once-taboo subject of an exit from the 17-country currency union on the agenda, lifting the veil on possible scenario planning afoot behind the scenes.

If Greece decides not to stay in the euro zone, we cannot force Greece,” German Finance Minister Wolfgang Schaeuble said at a conference sponsored by German broadcaster WDR in Brussels yesterday. “They will decide whether to stay in the euro zone or not.”

(Bloomberg) May 10, 2012 — Concern over whether Greece will keep the euro after the May 6 election caused an outflow of deposits to Cyprus, Phileleftheros reported, without saying how it obtained the information.

Depositors are seeking Cypriot banks and subsidiaries of Greek banks on the island, the newspaper said.

(Bloomberg) May 10, 2012 — Greece’s Evangelos Venizelos, the socialist Pasok leader and former finance minister, said he saw the first “good omen” in four days of attempts to form a coalition government that would avert a new election.

He spoke after Democratic Left leader Fotis Kouvelis outlined a proposal for a unity government that will work to keep the country in the euro and the European Union while negotiating a gradual “disengagement” from bailout austerity measures.

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