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Thursday, January 1, 2015

Greek faces snap elections on January 25th with leftist Syriza party in the lead in polls

The Greek prime minister Antonis Samaris failed on his third and final attempt to have parliament accept his candidate, Stavros Dimos, as president of Greece.

Dimos, a former European Commissioner, was the only candidate and failed to receive the 180 votes needed for election. The Greek constitution now requires elections and the dissolution of parliament. Samaris announced immediately after the vote that he will call on the outgoing president and propose holding elections on January 25th. Dimos received 168 votes in parliament — 12 short of the number required. Parliament must now be dissolved within ten days. The leftist party Syriza is leading in the polls. Should the party win it will insist on renegotiating the terms of the Greek bailout. After the vote, the leader of Syriza, Alexis Tsipras said: "With the will of our people, in a few days bailouts tied to austerity will be a thing of the past.The future has already begun." 
After the vote, the Athens stock market dropped by 7 percent and Greek bond interest rose above 9 percent. Theodore Krintas of Attica Bank in Athens said; "The outcome of the final vote extends the political uncertainty for at least one month, One cannot know if the result of early elections will be a viable government.No significant economic decisions can be made before there is a new government and this is already reflected in the markets today," Samaris, took a gamble in trying to elect Dimos as president. After the vote, he said: “The government did everything possible to get a new president elected and a minority of MPs now drags the country to early elections. I will do everything to guarantee that the country stays on the path of reforms.” 
 A team of negotiators from the Troika of lenders — the European Commission, the IMF and the European Central Bank — had been scheduled to resume final talks to wind up the $290 billion bailout and agree to a post-bailout program. Of late, Tsipras has attempted to calm investor fears, claiming he wants to keep Greece in the Eurozone. He also wants to negotiate ending the bailout program with its austerity conditions rather than acting unilaterally.However, he still insists that he will reverse many of the austerity measures required by the bailout. He also will reverse cuts to the minimum wage, stop state layoffs, and halt privatization of state assets. All of these measures send shivers down the spine of many investors, who see lower wages as a means to greater profits and privatization as a means to snatch valuable state assets at fire sale prices.  
George Pagoulatos of the Athens University of Economics and Business summed up the situation as the elections approach: “These elections will be a struggle between fear for euro exit and anger against austerity,The government will be emphasizing the risks associated with Syriza’s anti-bailout stance and Syriza will try to convince voters that it can offer a viable alternative, without endangering the country’s euro membership.”

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