Greek Stocks Tumble, Drag Periphery Down, On Election Fears, Retroactive Tax

Tyler Durden's picture

Four years and three prime ministers after Greece’s then premier, George Papandreou, requested an international bailout that slammed his nation with painful austerity (but saved the EU banks), Bloomberg notes that political instability still haunts Greece. Despite issuing bonds and GDP coming in slightly better than expected (still in recession/depression), former Prime Minister Costas Simitis of Pasok admits "The euro crisis seems to be over but its causes have not withered away," and if election polls are anything to go by, the fragile fraud that is a Greek recovery is set for problems Samaras' governing coalition as Syriza (the opposition that rejected the bailout terms) support soars and Pasok plunged to sixth place with just 5.5% support. In addition, retroactive taxes on bond gains are weighing on European bond markets (and Greek stocks).


First - there's this - Greece has decided to instigate a retroactive tax on gains made on Greek government debt...

The provisions of the Circular refer to both non-resident individual and non-resident legal entities without a Greek permanent residence/establishment that have realised capital gains from Greek debt (including government and corporate debt which is either listed or unlisted) in the period between 29 February 2012 and 31 December 2013.


The tax imposed on such capital gains is 33% for legal entities and 20% for individuals

In other words - if you damn speculators made money on the back of the ECB's promise, fuck you pay me!

Greek Stocks are not happy...


and the new 5Y bond issue is tanking...


The reaction to this uncertainty is clear in bonds...


And, as Bloomberg reports, the political event risk suddenly got serious

While New Democracy trails Syriza, the opposition group that rejected the terms of the bailout packages, the bigger threat to the government may be the collapse in support for Samaras’s coalition partner Pasok. Papandreou’s Pasok, which dominated Greek politics for three decades, plunged to sixth place with just 5.5 percent of the vote in a recent poll as voters blame the party for the country’s economic meltdown.


Samaras’s governing coalition has 152 lawmakers in the country’s 300-seat legislature. The prospect of the 27 Pasok lawmakers withdrawing their support could deter the foreign investors helping to fuel the recovery, according to Megan Greene, chief economist at Maverick Intelligence and a columnist with Bloomberg View.


If there were snap elections and investors were spooked by the prospect of Syriza being the negotiator for Greece, it could really hurt the Greek recovery because it’s so fragile,” she said in a telephone interview.




The euro crisis seems to be over but its causes have not withered away,” former Prime Minister Costas Simitis of Pasok, the socialist party that dominated Greek politics for three decades, said in a written response to questions. “High unemployment and uncertainty fuel euro-skepticism, while member-states become increasingly reluctant to cede more power to European institutions.”




Syriza wants a clean victory in order to put an end to the catastrophic path of one-sided austerity and great depression,” Dimitris Papadimoulis, a Syriza candidate said in an interview.




“Greece used to have a very stable political landscape,” said John Loulis, an Athens-based political analyst and communications strategist. “But the landscape has shifted dramatically. There is a big chance that we may see surprises the night of the elections.”




“We’re treating these elections as if they were a super opinion poll for national elections,” Lyberaki said in a May 13 telephone interview. “Reducing this to a choice between austerity and Syriza does a disservice to the guy in the street who’s in favor of Europe but has been brought to his knees by taxes.”

Except that is exactly what it is... and it seems investors are starting to comprehend that as IceCap noted last night.

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Bernoulli's picture

Don't worry, Goldman Sachs will do "whatever it takes".

GetZeeGold's picture



Retroactive tax.....all the way back to 1776.

john39's picture

retroactive tax... orwell would appreciate the creative use of terminology.  thievery would be accurate.

Haus-Targaryen's picture

Syriza does have the superior argument. Its essentially

"Give us an unlimited amount of money for free, or we destroy the EU and the Western Banking System."

If I were a Greek, I'd be voting for them.

Could you imagine the press confrence, Sexy Lexi;

We are officially defaulting on all outstanding debt obligations.  All Greek debt is now null and void.  This means that the 110 Billion the ECB owns is now worth zero, and the ECB is insolvant.  The 85 Billion that Soc Gen and BNP own are worthless, and both those banks are insolvent.  This means that the 44 Billion that Deutsche Bank owns are insolvant (and on down the list he goes). 

He concludes with "I highly recommending running, not walking to your closest ATM and pulling out as much cash as you can from these institutions, as its quite likely you will have nothing tomorrow." 

Drops the Mic and walks out into witness/KGP protection.

lordylord's picture

The EU and most Europeans are a JOKE.  They hate their kings and queens but love to be ruled by them.

Dr. Engali's picture

I have an idea Greece.... now go with me on this......  Be the first nation in the world to grow your balls back and start hanging some bankers. Let the birthplace of democracy set the example for the rest of the world.... just a thought.

Jlasoon's picture

Time to roll in the NSA approved electronic voting machines. 

tiger uppercut's picture

Syriza and UKIP need to be vigilant against vote-rigging. Democracy is starting to become inconvenient for the TPTB.

LawsofPhysics's picture

Can we have a "credit event" already?  Pretty please?

Blow that fucking CDS market up already...

Meh, same as it ever was.

GetZeeGold's picture



Can we have a "credit event" already?


I'll take things that will never happen for a thousand Alex.

Dr. Engali's picture

Credit event...Lol... As you already know, it doesn't matter if there is an outright default there will never be a triggering event. CDS are nothing else but another tool of speculation in the great casino in the sky.

Ness.'s picture

Maybe Greece should place a call to Belgium and ask them for help because they seem to be awash in moola these days.

Dr. Engali's picture

What the hell does the dept. of ag. need with submachine guns?


Must be expecting crop protection for some odd reason.

XitSam's picture

To kill the Amish terrorists during raw milk raids.

yogibear's picture

The Euro garbage was never fixed. Trying paoper over it never would work. 

Just like the US has attemped to print and bubble-over it's structual problems.

Outsource your industry and attempt to financialize the economy and you get what the US has. 

TrustWho's picture

Idea for Yellen. Yellen should call it the Bernanke Thank-you Monday Morning Quaterback Tax

The provisions of the Circular refer to World residence/establishment that have realised capital gains from USA financial instruments either listed or unlisted in the period between 1F April 2009 and 31 December 2013. With QE, all gains have been directly related to Bernanke's Put, so the grand Wizard of the financial markets has decided to share 50% of this gift with the purchasers of said instruments while the state will take the other 50%.


Spungo's picture

Discourage people who planned to buy Greek bonds. I like this idea.