Pro-Bailout Parties win in Greece

[Bigfella]

So, it looks like the pro-baliout parties will be able to form a government in Greece. Most likely this will lead to a limited re-negotiation of the bailout, but no 'Grexit', no collapse of the Euro, no opening of the 7th seal etc. The Euro crisis is far feom over & a solution is yet to be found. This does, however, avert one significant crisis point. Lets hope Merkel gets here act together & helps Europe find a way out of this.

Wonder if those companies that allegedly printed Drachma will sell them on ebay.

The pro-bailout New Democracy party has come in first in the Greek election, and its leader has proposed forming a pro-euro coalition government.

In claiming victory, New Democracy leader Antonis Samaras said "the Greek people today voted for Greece to remain on its European path and in the eurozone".

He said voters chose "policies that will bring jobs, growth, justice and security".

His party beat the anti-bailout Syriza party, which wanted to cancel Greece's international bailouts.

Syriza chief Alexis Tsipras, a 37-year-old former communist who has shot from obscurity to global celebrity in a matter of weeks, has conceded defeat in the election.

Although no party has won enough seats to form a new government on its own, the polls indicate the country's two traditional parties - New Democracy and Pasok - will have enough seats to form a coalition together.

An official projection released by the interior ministry showed conservative New Democracy taking 29.5 per cent, with the radical leftist Syriza bloc just behind on 27.1. The Pasok Socialists were set to take 12.3 per cent of the vote.

Because of a 50-seat bonus given to the party which comes first, that result would give New Democracy and Pasok 161 seats in the 300-seat parliament, in an alliance committed to a 130 billion euro ($164 billion) EU/IMF bailout keeping the country from bankruptcy.

Greece Election Results | Greeks Vote Euro, Pro-Bailout Parties

[tbm3fan]

The third place socialist party wants the top four parties to form a coalition government. Of course, the Democratic Left was fifth, as the Golden Dawn was really the fourth place winner. So a government comprised of the New Democracy, Syriza, Pasok and Democratic Left...:pop:

[tantalus]

Wonder if those companies that allegedly printed Drachma will sell them on ebay.

I wouldnt be getting rid of them too quickly. Anyway, there are those who feel that a greek exit can still happen even with this election scenario. It is not a decisive factor on greece's future in the eurozone.

Citigroup Inc. said even under a New Democracy-led government, Greece’s problems are so challenging that there’s a 50 to 75 percent chance it will get pushed out of the euro in the next year or two.

Berenberg Bank’s Holger Schmieding says European officials seem “ready to reward a responsible Greek government,” and the election is “too close to call.” He gives the following scenarios:

-- A New Democracy win and a coalition with Pasok will coax Germany to overlook doubts on Greece and allow Europe to adjust the bailout program and even possibly add to support. In this case, the probability of Greece being in the euro by the end of 2012 is 75 percent, according to Berenberg.

Greek Vote Outcomes Range From Coalition to Euro Exit: Scenarios - Bloomberg

Truth is nobody seems to know. I have alwlays felt that the other 16 countries cant afford a greek exit, contagion in the form of bank runs and increased bond rates was too great a risk and therefore measures would be taken to convince greece to stay if they really looked like threatening to leave. Even Syriza have softened their talk in recent weeks and would have come to the table to talk. At the very least, it looks essential that the Greeks dont leave now, measures have to be taken to firewall the situation, increase bailout funds, fully bailout the spanish, increase funding to the banks eurozone wide and the other 16 will want to be further down the road in creating a banking and finally a fiscal union before even considering a greek exit. Thats were this is all going imo. Politically convincing everyone seems like an impossibility, yet I expect things to get worse, the worser they get, the easier it will be for leaders to swallow measures agreed by France and Germany towards creating this new fiscal union.

The end result will be some form of debt mutualisation, but the germans wont agree to that til a tighter fiscal union is in place.

[tantalus]

The third place socialist party wants the top four parties to form a coalition government. Of course, the Democratic Left was fifth, as the Golden Dawn was really the fourth place winner. So a government comprised of the New Democracy, Syriza, Pasok and Democratic Left...:pop:

Syriza have ruled themselves out on that one. It will have to be ND and Pasok together. They wont see a third election as an option. Greece will hobble along for the time being with some small concessions to the bailout terms I expect.

[RollingWave]

Waiting for them to actually form a government first.... zzzzzzzz instead of ending up like their last "victory"

Personally, my money's on the Greeks existing within a year or two at the most.

[Doktor]

Waiting for them to actually form a government first.... zzzzzzzz instead of ending up like their last "victory"

Seems ND and Pasok will form it. How it will work one has to wonder.
Greece's New Democracy, Pasok Likely To Form Coalition By Wednesday-Sources - WSJ.com

Personally, my money's on the Greeks existing within a year or two at the most.

No Greeks after 2 years?

[Doktor]

Greece outlines plan to ease bailout burden

(Reuters) - Greece wants tax cuts, extra help for the poor and unemployed, a freeze on public sector lay-offs and more time to cut its deficit under a plan likely to run into strong opposition at a European Union summit next week.


The new coalition government's program, seen by Reuters on Saturday, reflected public pressure to ease the terms of a 130 billion euro ($163 billion) bailout saving Greece from bankruptcy but only at the cost of harsh economic suffering.

If implemented in full, the new program would undo many austerity measures the country agreed in February to clinch the bailout package, its second since 2010.

Euro zone partners have offered adjustments but no radical rewrite of the bailout conditions, with paymaster Germany particularly resistant to Greek calls for leniency.

Greece's program includes a call for the recapitalization of the country's fifth-largest lender, ATEbank - a state-owned agricultural bank that EU sources said this month was among several lenders the European Commission wanted to be wound down. The finance ministry has denied that report.

The program, agreed by leaders of the three-party coalition after a June 17 election, faces its first test at a two-day EU summit starting next Thursday and sure to be dominated by the debt crisis that started in Greece and is now threatening to engulf Italy and Spain, the euro zone's third and fourth-largest economies, respectively.

Inspectors from Greece's "troika" of lenders - the EU, European Central Bank and International Monetary Fund - were due in Athens on Monday to review the country's progress.

Euro zone officials have said the bailout package should be revised only to reflect time lost on two elections since early May and a deeper than expected recession.

"The general target is for there to be no further reductions in wages or pensions and no more taxes," the Greek government program said.

UNEASY ALLIES

It called for a cut in the 23-percent value-added tax (sales tax) rate for restaurants and farmers, a freeze on lay-offs in the bloated public sector and for unemployment benefit to be paid for two years rather than one.

The government will also ask for two more years, until 2016, to cut its budget deficit to 2.1 percent of national economic output from 9.3 percent in 2011, an extension that would require extra foreign funding.

The lowest income tax threshold should be raised, the document said, and the minimum wage - cut by 22 percent in February - revised in line with agreements between employers and workers.

The program also calls for the accelerated payment of 6 billion euros of government debt to suppliers.

The coalition brings together the conservative New Democracy, Socialist PASOK and Democratic Left in an alliance that will face constant pressure from an opposition led by the radical leftist Syriza bloc.

Led by charismatic ex-communist Alexis Tsipras, Syriza surged into second place in the election on a vow to tear up the terms of the bailout.

Conservative Prime Minister Antonis Samaras, a Harvard-educated economist who switched from opposing the first bailout to reluctantly supporting the second, has promised to soften the terms without jeopardizing Greece's place in the euro zone.

"Though the troika will be in Athens on Monday, the crunch test will be Thursday's EU summit," the centre-left Ethnos daily wrote in an editorial on Saturday.

($1 = 0.7977 euro)

(Writing by Matt Robinson; Editing by Barry Moody and Dan Lalor)

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Wishful thinking on Greek side?