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.”

Will Greece receive more funds from the Troika?

        Troika inspectors from the IMF, European Commission, and European Central Bank  are back in Greece meeting with Greek officials. The Prime Minister Antonis Samaras said that he would push ahead with the implementing deep cuts demanded by the Troika. At the same time Samaras lashed out at foreign officials whom he did not name for trying to sabotage Greece's efforts to find a solution to its problems
     Samaras complained about foreign officials who openly said that Greece could not make its commitments. Samaras said:
   The Troika will decide whether to continue providing more scheduled payments of  bailout money to Greece. If they decide not to extend more aid Greece could default on payments and perhaps be forced to leave the Euro zone.  "I say it openly and publicly, they undermine our national effort. We do all we can to bring the country back on its feet and they do all they can so we can fail," 
    Over last weekend on Sunday the German economic minister said he did not expect Greece could fulfill its  obligations under the bailout conditions. As a result, there would be no more money for Greece. Samaras wants to negotiate along with his coalition partners changes to the bailout terms. Samaras faces strong opposition within Greece to the harsh austerity measures imposed by the Troika as a condition for receiving bailout funds.
      The Greek economy has been declining at a rate of around 7 per cent this year after years of recession. Further austerity will likely decrease output further. Unemployment is close to 24 per cent..
   Troika officials claim that the Greek government is not implementing pro-growth measures such as privatizations, tax reform, and opening closed markets and professions. A source from the Troika told Reuters:"The programme has not produced the desired results because it was not implemented. We must first see the government fulfill its commitments and then decide if it works or if it needs to be adjusted." The Troika may be asking for what is not politically possible in the present context. For more see this article.