Greek officials meet with Troika to discuss bailout terms

   Greek officials meet with the Troika officials (European Central Bank, European Commission and International Monetary Fund) to discuss the terms of the Greek bailout fund. Yannis Stournaras an economist is the new Greek finance minister.
  Greece has imposed unpopular stringent austerity measures including cuts to salaries and pensions and higher taxes. However Greece is still struggling to reach financial targets and hopes to revise some of the conditions. However Sweden's Finance Minister said:"The way the situation has been handled so far, and with the high debt levels they have it can't be ruled out that it will all finally end in a bankruptcy.''
 The Greek government is now a three party coalition with New Democracy being the largest partner. However, the leftist anti-austerity party Styriza came a close second in the elections. The government is to present a policy statement on Friday evening to parliament.  Reports are that the coalition is recommending freezing public sector layoffs and repealing some tax hikes. This might produce some economic growth but may be resisted by the Troika.
   The bailouts total 300 billion. Germany has demanded that Greece stick to its austerity program. If the new government does not achieve any significant changes in the austerity program there could be considerable social unrest. For more see this article.

Pro bailout party New Democracy comes in first in Greek elections

The pro-bailout New Democracy party leads in the polls with about half the votes counted with just over 30 per cent. The leftist anti-bailout Syriza party is second with just over 26 per cent. The PASOK (socialist) party trails with under 13 per cent.

New Democracy will be faced with a tough task to form a coalition. The logical choice would be PASOK with which a coalition was formed before. However, PASOK has insisted it will only join a coalition if Syriza is included. There is little likelihood that Syriza would join a coalition since its position is so much different than that of New Democracy.

It may take several days for New Democracy to put together a coalition assuming it can.

Antonis Samaras, leader of New Democracy said:: "The Greek people have voted today for the European direction of the country and for us to remain in the euro, and it voted for those policies which will bring jobs... " For more see this article. While investors will be glad that Syriza did not win there still will be uncertainty until at least a new government is formed and the bailout deal approved.

Greek election results Sunday are uncertain

A day before the election on Sunday June 17th many Greeks are angry now and anxious about the future. Stathis Psillos a philosophy prof. at the U. of Athens said:“People are in agony about their savings; their jobs, their safety, their future (and their children’s future),”

Polls have not been allowed for the last couple of weeks of the campaign but the two front runners New Democracy that is in favor of the bailout deal and Styriza that would rip it up and start over are very close to one another. Even New Democracy the center right party that came first last time wants to change some of the terms of the agreement although it voted in favor of the original deal.

The party that comes first gains an extra 50 seats in parliament under the Greek system so is the most likely to be able to form a coalition. However New Democracy was unable to cobble together a coalition last time around. If Styriza comes first there are several parties that it could probably bring into a coalition and form a government that would want to renegotiate the whole bailout deal. This result might result in markets falling throughout Europe and elsewhere. However as of the close Friday U.S. markets were still positive.

Many analysts are now predicting that Greece will eventually be forced into leaving the euro, that this is just a matter of time. For more see this article.

Greece: No coalition government in sight as yet

Alexis Tsipras leader of the 2nd place Styriza party has so far been unable to form a coalition government. Given that the two other largest parties support the bailout deal while his party opposes it, it seems unlikely that he can form a government. If he fails then the task will fall upon the third place PASOK socialist party. However, it too is unlikely to be able to form a coalition. If this happens there will need to be new elections in June.

The leader of the New Democracy party Samaras was himself unable to form a coalition earlier. International creditors have been warning Greece that if the austerity measures are not implemented then bailout money will not be forthcoming in June. The uncertainty resulting from Greek politics is one of the reasons stock markets in many countries have declined of late. Greece has also promised that it will pass new austerity measures worth 18.9 billion next month as well as implement agreed upon measures. Given the political situation it seems quite unlikely that this will happen.

The Communist Party has refused to join any coalition government and the right wing New Dawn party has not been contacted by any one as yet since it is regarded as too extreme apparently. Tsipras wants Greece to pull out of the bailout agreement. This position puts him at odds with both New Democracy and PASOK. The New Democracy leader said"Denouncing the agreement, as [Tsipras] proposes, will lead to immediate internal collapse and international bankruptcy, with the inevitable exit from Europe," However, Samaras was open to amending the agreement.

Greece received two bailouts worth 312 billion dollars. In return salaries and pensions have been cut, state jobs eliminated, and new taxes imposed. The result has been continued recession now lasting five years.

The German foreign minister said that Greece will not obtain any further loans unless it continues its austerity policies. He said:"Germany would like to keep Greece in the euro zone but whether Greece actually does remain in the euro zone or not lies in its own hands," However it looks more and more as if Greece will not meet the demands of the EU and will end up bankrupt and leaving the Euro zone. For more see this article.