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Greece Heads Back To The Polls: Full Sunday Election Preview
For months on end, all anyone could talk about was Greece. Throughout the spring and summer, the country’s fate in the eurozone was considered the main risk to global markets if not for what the financial fallout from a Grexit would be (that risk was largely confined to the public sector), then for what a Grexit would mean for the future of Europe’s fragile currency union.
Then, a funny thing happened. Everyone forgot about Greece.
On the heels of a final, dramatic showdown in Brussels that pitted PM Alexis Tsipras (who came in wielding a referendum “no” vote from his people) against German Finance Minister Wolfgang Schaeuble and saw Greece finally capitulate after a weekend of “mental waterboarding,” the world seemingly accepted the fact that Athens will remain a debt serf for decades to come, and although the issues of debt relief and bank recapitalization remain contentious, it seems that a Greek exit is no longer on the table.
Late in August, Tsipras resigned, setting in motion a series of events which would lead to snap elections. Again, the news was greeted with little fanfare as, by that point, the market had turned its attention to China, its currency, its stock market, its economy, and how it would all factor into the Fed decision in September.
Well, as we head into the weekend (liftoff-less, still), it’s worth noting that Greece is having an election on Sunday, and although the outcome is unlikely to change the course of the bailout deal, black swans wouldn’t be black swans if they were easy to spot ahead of time and if the first half of the year taught us anything, it’s that “inconsequential” things like Greek politics actually do matter for markets, and it’s with those two considerations in mind, that we present Bloomberg’s four scenarios for the Greek election outcome.
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From Bloomberg
Scenario 1: Moderate Coalition Government
The two (alternate) poll leaders Syriza and New Democracy are unlikely to win with an absolute majority. Our baseline scenario therefore is a new round of coalition patch-working to start as soon as next week and result in a moderate center-left or center-right coalition. The victorious party will win a 50-seat bonus and be given the mandate by President Prokopis Pavlopoulos to form a coalition. If Syriza comes first, it will probably turn to smaller, centrist parties such as Pasok and/or To Potami to build a "progressive" coalition — as Tsipras put it during the campaign. In the case of a New Democracy victory, the party would also go hunting among the same smaller parties for allies. The quick formation of a new government would enable the legislative business to restart and get the ball rolling on the required reforms ahead of the next bailout program review — currently scheduled for October.
Scenario 2: Grand Coalition
If coalition talks with small parties fail to bring a solid majority, the two main parties could reach out to each other. New Democracy new leader Vangelis Meimarakis already said he could work with Syriza. By contrast, Tsipras ruled that prospect out — but he has shown some unexpected pragmatic skills lately. We see a grand coalition between two ideologically different parties becoming a reality only as a last resort. Both parties do want to respect the bailout program commitments, but they have opposite views on pretty much everything else. The collaboration would therefore be quite unstable and short-lived in our opinion. Furthermore, in this scenario the main opposition party could end up being the third-polling Golden Dawn, a neo-Nazi party. Not the kind of constructive opposition you’d wish in a democracy.

Scenario 3: New New Elections
The elections could result in an overly fragmented Parliament and unsuccessful coalition talks. That would be a remake of 2012. Back then, the May general elections resulted in a deadlocked political situation leading to new elections he month after and the eventual formation of a coalition led by Antonis Samaras. In this scenario, Greece would lose at least another month marked by political uncertainty before the organization of yet more elections. The implementation of the program would fall behind schedule and some creditors could lose patience and trust — two virtues which are not trending particularly high right now.
Scenario 4: Absolute Majority
One party reaching an absolute majority is the least likely scenario, but arguably the best one for the implementation of the bailout program and the stability of the euro area. A single-party government would have a longer life expectancy than any coalition, potentially able to serve a full term mandate of four years. That would cover the entire program period until 2018. Yet this scenario remains the least probable given the state of public opinion. Both Syriza and New Democracy have been polling around 25 percent. That’s far from Syriza’s victorious score of 36.3 percent in January which fell short of absolute majority by only one seat.
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For his part, Tsipras is confident that despite polls that show Syriza running neck and neck with New Democracy, when it comes time for Greeks to cast their ballots, he we prevail. "There is a voting body that is below the radar, it is not being traced," he told told Greece's ANT 1 television.
As for New Democracy leader Vengelis Meimarakis, he’s looking to capitalize on what he hopes are public doubts about Tsipras after the former PM sold out the referendum “no” vote in Brussels. “The question is clear. Should we listen to false promises and wishful thinking, or move forward responsibly and with a national plan? It's high time we did away with incompetence. The Syriza experiment ends on Sunday."
The unfortunate reality here is that the Syriza vision that resonated so well with voters in January has, in the space of just nine months, been relegated to the realm of "wishful thinking" and as should be clear from the above, even if Tsipras wins, this is not the Tsipras who swept to power earlier this year and this version of Syriza has been watered down in the wake of the split which saw Panagiotis Lafazanis form his own, break away party last month.
In short, the IMF, Berlin, and Brussels got what they wanted - even if the fight was perhaps more difficult than they had imagined. Democracy has been undermined in Greece by the purse string and although Europe's methods were more subtle than say, Turkey's, the outcome is the same: a democratic election result that was seen as undesirable by those who ultimately control Europe was nullified and the will of the Greek people has been subverted.
Now, Greeks find themselves going to the polls facing a situation that will be familiar to many American voters - a choice between two parties that claim to be diametrically opposed, but who are actually all too similar.
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From Deutsche Bank
One event which has somewhat flown under the radar is Greece’s general election this Sunday. The recent polls have been too close to call, with fairly evenly split support for Syriza and New Democracy although neither is likely to control a majority in parliament. The successful conclusion of the 3rd ESM package and broad-based political support to meet creditors’ demands eliminated a lot of the political risk however and as DB’s George Saravelos pointed out previously the eventual outcome of the vote may not entail particularly different paths ahead. The bigger picture is the popular support towards underlying Eurozone membership as the key underlying factor behind ensuring that Greece’s path towards stabilization is in place.
From Citi
Sunday's election should show political system remains fragmented and uncertain. Five new polls released since yesterday suggest that uncertainty around the outcome of Sunday’s election remains as high as ever. Three polls (from Alco, Metron Analysis and Pulse pollsters) see the two main parties, New Democracy and Syriza, with almost exactly the same share of votes (27.4% vs 27%, 31.6% vs 31.9%, and both even at 29%, respectively for the three pollsters). Another poll by the Interview shows a ND lead at 32.8% vs. 30.6% for Syriza. An E-voice poll instead puts Syriza at 32.6% and ND at 28.5%. Comment: recent polls suggest that ND has increased its support and closed the gap with Syriza, but probably not enough to win the election, and most importantly to win a parliamentary majority. A Syriza win remains our base-case scenario, with a coalition with smaller centre-left parties likely to be necessary to form the next government. However, whichever party wins Sunday’s election, it will probably take a while for the next government to be formed and it is likely to be a fragile one. This would make it difficult to implement quickly the Memorandum requests necessary to get additional financial help and, crucially, to recapitalize Greek lenders. We believe that Greece’s position within the Eurozone could come into question again within the next few months.
From Nomura (via Bloomberg)
A bad outcome would be a highly fragmented parliament, with Syriza and New Democracy getting very low shares of the vote, in which case more parties will be needed to form a government. A disastrous scenario would see Golden Dawn, and the anti-European parties getting a really high share of the vote. But that’s just a tail risk and it’s highly unlikely to happen. Even a bad scenario will probably be good-enough for investors in the grand scheme of things.
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Who cares!?! .... football is back and the hockey preseason is about to start.
Excuse me...but didn't they just totally ignore the last vote?
Vote A = Bankers win. Vote B = Bankers win. Who the fuck cares?
Wake me up if they vote their Nazi party in.
Wake me up when the sheeple stop hitting the Rinse, Repeat button and actually take back their country, until then they deserve the Troika ass raping they are receiving...
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Mister President, we have been listening and applauding Norway’s prime minister when she spoke right here. She is European but she said that the whole debt cannot be repaid. Debt cannot be repaid, first because if we don’t repay, lenders will not die. That is fore sure. But if we repay, we are going to die. That is also for sure.
Those who led us to indebting had gambled as if in a casino. As long as they had gains, there was no debate. But now that they suffer losses, they demand repayment. And we talk about crisis. No, Mr President, they played, they lost, that’s the rule of the game, and life goes on. We cannot repay because we don’t have any means to do so. We cannot pay because we are not responsible for this debt. We cannot repay but the others owe us what the greatest wealth could never repay, that is blood debt. Our blood had flowed. ...
Debt is also the result of confrontation. When we are told about economic crisis, nobody says that this crisis didn’t come about suddenly. The crisis had always been there but it got worse each time that popular masses become more and more conscious of their rights against exploiters.
We are in a crisis today because masses refuse wealth to be concentrated into a few individual’s hands.
We are in crisis because some people are saving huge sums of money on foreign bank accounts that would be enough to develop Africa. We are in a crisis because we are facing this private wealth that we cannot name.
Popular masses don’t want to live in ghettos and slums. We are in a crisis because everywhere people refuse to repeat the problems of Soweto and Johannesburg.
There is a struggle, and its amplification worry those with the financial power. Now we are asked to be accomplices for a balancing. A balance favouring those with the financial power. A balancing against popular masses.
No! We cannot be accomplices. No! We cannot go with those who suck our people’s blood and live on our people’s sweat. We cannot go with them in their murdering methods.
Mr President, we hear about clubs – club of Rome, club of Paris, club everywhere. We hear about Group of Five, Group of Seven, Group of Ten, and maybe Group of A Hundred. And what else? It is normal that we too have our own club and our own group. Let’s Addis Adeba becoming from now the center from which will come a new breath. A club of Addis Adeba.
It is our duty to create an Addis Adeba’s unified front against debt. That is the only way to assert that refusing to repay is not an aggressive move on our part, but a fraternal move to speak the truth.
Furthermore, popular masses of Europe are not opposed to popular masses of Africa. Those who want to exploit Africa are those who exploit Europe, too. We have a common enemy. So our club of Addis Adeba will have to explain to each and all that debt shall not be repaid. And by saying that, we are not against morals, dignity and keeping one’s word. We think we don’t have the same morality as others…
I would like this conference to clearly declare that we cannot pay the debt. Not in a rebellious spirit but just to avoid being assassinated individually. If Burkina Faso is the only one that refuses to pay, I won't be here at the next conference. On the other hand with everybody's support, we can do it.
What?!.....Greece?!....Election?!....get outa here you crazy kids....we got REAL problems to deal with this week....
No worries, the world wide PPT will protect us all.
Yay, moar Greece! Oh how I missed stories about you. The nail biting keep you on the edge of your seat fed rate hike of the century stories were getting tiresome. Now, back to our regulary scheduled program. Ebola coming up after a few words from our sponsors.
I actually forgot about the ebola.
Oh yeah......I remember the ebola czar.......what was his name again?
i believe he was hispanic but it was the CDC guy always in the interviews.
i believe he was hispanic
Yeah, he changed his name from Klainirez.....to just Klain.
saint -- it goes way back, prior to the internet it was plain ole bola
Never heard it called that before. That shows you how much I paid attention back in the day when the world was simple.
What nails I have left after the rate hike suspense are now to be removed totally for the debt ceiling cliff-hanger
in the morning on BBC radio one greek woman was interviewed about upcoming elections in greece and she said she does not intend to go to vote at all because whoever wins will have to push and implement what had already been decided by the troika
Keep the people delusional thinking their vote counts.
In Greece just like any country that holds elections, big gubmint gets the gold mine and you get the shaft.
Serf on!
Bring back clipbaord guy!
What Greek in their right mind would vote for Syriza now. The fact they can poll anything shows how idiotic this whole system of "demokracy" has become.
So tell us, what's the better alternative?
Should Greece vote for someone who wants to default and have Greece end up a 3rd world country? Default doesn't mean their debt is wiped out.
It's the equivalent of someone quitting their job because they are angry they have to pay their mortgage. That doesn't end well....
Anopheles
Permanent indentured servitude is not the best alternative for Greece.
Your analogy between personal and national Greek "debt" is totally off base.
http://www.zerohedge.com/news/2015-03-04/imf-director-admits-greek-bailo...
http://www.zerohedge.com/news/2015-07-06/who-biggest-winner-greek-tragedy
You're right, it's not the best alternative. However the Greeks CHOSE to become indentured servants. They kept electing governments that promised to "borrow/spend themselves into prosperity"
Now they finely woke up to the realization that borrowing doesn't have consequences? Too bad. They (the Greek people) need to grow up and learn how the real world operates.
shitocracy
According to the Dublin accord signed by Greece's Simitis(a jew zionist of coarse), the country of first entry is responsible for the "migrants". This means boys and girls- Greece will be forced to take all of these people back! This means the total destruction and replacement of the Greek people from their homeland.
Golden dawn increase in seats is almost certain!
You mustn't blame Greeks for being confused by the elections.
It is so hard to decide who is the lesser evil,
when they are all no less evil.
At this rate, Greece will be holding monthly elections/referenda by 2016.
They will spend all of the bail out money on elections.
Golden Dawn gets 15% of the vote in the new election; 25% in the new new election.
Is it time already to talk about Greece? I thought eur/usd have to reach ~0.8 first...