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The Four Greek Election Scenarios

Tyler Durden's picture




 

With any possible majority likely to be quite weak, and about two weeks to go, the outcome of this second election remains highly uncertain. While we're happy to leave the ever-changing chances of all the possible government combinations to the Greek political commentators (or media pollsters asking 1000 people), we think that the chances of a pro-bailout majority in parliament – at least for a short while – are slightly less than even at best. Morgan Stanley recently opined on the four possibilities with all centered on Syriza's actions.

Thomson-Reuters' interactive poll tracker here...

How Do The Greek Polls Work?

The 300-seat parliament is elected every four years. The so-called reinforced proportional system gives the first party a higher share of parliamentary seats than its actual share of votes. For the first time, the May 6 election saw the application of a recent amendment to the electoral law, such that 50 seats in parliament (rather than 40 as before) were allocated to the first party (centre-right New Democracy, ND). Another 12 seats were allocated on a national level (the so-called statewide deputies), while the remaining 238 seats were filled in eight single and 48 multi-member constituencies. To participate in the allocation of seats, or enter parliament, a political party had to receive at least 3% of the valid votes cast nationwide. The election in June will follow the same mechanism.

And What Are The Possible Outcomes:

  1. SYRIZA forms a government with other far-left parties. While probably the most negative, as it would increase the probability of a Greek exit in the near term, we think that such a scenario is unlikely – given that relations between SYRIZA and other far-left parties appear poor, and that the numbers to form a government don’t seem to be there, based on current polls.
  2. SYRIZA joins a centrist government and drops its demands. This would be a more positive outcome, even though we suspect that investors would doubt that such a coalition could last for quite a while. We believe that such a scenario is highly unlikely, because SYRIZA’s popularity and support depend on its anti-bailout stance.
  3. Technocratic government. This could be a workable solution for little while, and a positive one in the near term – given that compliance with the Troika’s demands could be restored – but we suspect that investors might stay sceptical, as in this case too the longevity of such an arrangement will depend on SYRIZA’s support. As such, we think that it’s just a little more likely than the previous two scenarios.
  4. ND and PASOK, perhaps with some support from one or two smaller parties, form a government. We think that chances are perhaps close to or a bit below 50% at this stage, and the dispersion of the various outcomes is quite wide. Yet, despite the still-low probability, we believe that this is the most likely and positive scenario and would ensure, at least for some time, that Greece attempts again to comply with the fiscal and reform programme and stay in the monetary union.

 

Regardless of the final outcome, the probabilities of which are likely to change wildly over the next few weeks, we believe it is likely that, just as with the previous election, there will be several iterations (maximum allowed is three of three days each) from various party leaders to form a government, and perhaps one final iteration from the Greek President of the Republic. Thus, uncertainty is likely to stay high until the end of June.

 

Source: Morgan Stanley

 

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Thu, 05/31/2012 - 13:58 | 2480484 Haddock
Haddock's picture

Dreadful, dire, directionless, democratic...

Thu, 05/31/2012 - 14:04 | 2480526 Ahmeexnal
Ahmeexnal's picture

Ahmeexnal sees hyper-aufblasen in europe's future.

Thu, 05/31/2012 - 14:22 | 2480631 Turd Ferguson
Turd Ferguson's picture

If Tsipras would listen to Hugo Salinas-Price, he would win the election. Watch this Keiser show for important details.

http://rt.com/programs/keiser-report/episode-295-max-keiser/

Thu, 05/31/2012 - 16:08 | 2481003 Ahmeexnal
Ahmeexnal's picture

Great interview. Thanks for the heads up TF (no pun intended).
Greece adopting silver would make the power elite shit themselves outside in!
Interesting to note that HSP mentions 30 one tenth of an ozt coins per citizen. That means 3 ozt per citizen. That would mean silver price would HAVE TO SKYROCKET!
While I might agree with Kaiser on a lot of issues (not on all) I can't stand the guy when he starts with his childish whining and screaming.

Thu, 05/31/2012 - 14:35 | 2480678 Cadavre
Cadavre's picture

Greeks should do as PIMCO's Gross (and everybody else with more common sense than a nail) advises: Do what Iceland did and tell the casino looses to settle their marks among themselves.. Keep your gold - it is worth more than any counterfeit wet paper Fuhrer Merklenstein has or will ever offer in a swap for it, and, AND, return to the drachma - let the remaining EZ pretend Jones Town is Oz.

Thu, 05/31/2012 - 15:00 | 2480763 Cupid Stunt
Cupid Stunt's picture

All four Greek election scenarios in one.

http://www.youtube.com/watch?v=NljVxqRpbw0

 

Thu, 05/31/2012 - 13:58 | 2480489 Burr's 2nd Shot
Burr's 2nd Shot's picture

Sorry, if the post doesn't include talking bears, I am not reading it.

Thu, 05/31/2012 - 14:38 | 2480641 greyghost
greyghost's picture

i am not reading this post either...what no neo-nazi headline? all the while the thug neo-communists take over. sarcasm off

Thu, 05/31/2012 - 13:58 | 2480492 russwinter
russwinter's picture

Something about the current scene doesn't add up.  All the common proposals/dogmas, viewed here, are just more one trick pony "bank recapitalization" wasteful schemes using public money, that not only leave the debt burdens in place, but adds to them.  If this is what they try to utilize, fade it.

Over the weekend, the markets were lathered up over a tightening in the Greek polls that went more towards the bailout, bankster parties.  Then Tuesday was new poll showed a dead heat, and the market tanked.  Overlooked in all this was an opinion poll commissioned by German state TV ZDF published on Friday showing that 79% of respondents rejected eurobonds as a solution to the crisis.  Support for euro membership appears to be waning as 50% of respondents (up from 43% in February) say they believed  Germany’s euro membership carried more disadvantages than advantages.

To quote Monty Python, now its time for something completely different.  I do think Germany blinks, but not in the way generally imagined. I am thinking that the election of Hollande may shift the now dead dogma towards more humanism, or the novel concept of humanitarian help.  Therefore I am suspecting that a surprise lays in store.  It is that Germany, and the rest of the EU,  could come up with a so called "Marshall Plan–style package" for Greece. Very little of the bailout money so far has gone to the Greek people,  it has  gone to the banksters. That is the core of the resentment and now the voting for neo-Nazis and Communists.  Germany has an historical understanding of this. Instead this will be nipped in the bud, as a 20 bn plus euro billion package (the equivalent of 10% of Greece’s shrunken GDP) going as aid to support the health, safety and welfare of actual human beings and create good will.  

This is not the solution, but with Greek society at least fed and fueled, a proper solution, an orderly debt restructuring, bank closures, and a controlled,   structured devaluation from the Euro can be implemented. This modest in the scheme of things Marshall Plan trump card will likely be pulled before the June 17th Greek election.

Thu, 05/31/2012 - 14:20 | 2480611 MeanReversion
MeanReversion's picture

Fat chance. Do you read all German opinion polls? There's a saying to the effect that all politics is local politics and the local politics here don't allow for this possibility. German voters will be none too happy about a Greek stimulus package (basically what you are implicitly suggesting) going to people they view as tax dodging corrupt thieves. This has ZERO chance of happening. At most you will get a relenting on the timetable for imposing austerity, maybe a 1 year extension, which gives everyone time to shore up the banking system pending an eventual Greek exit.

Thu, 05/31/2012 - 14:26 | 2480644 russwinter
russwinter's picture

Feeding people, giving them some fuel and basic medical care is not the same as a phony bankster stimulus program. The German polls don't ask the question in this light. 

Greece will then devalue and leave the Euro, but with a little backup. 

Thu, 05/31/2012 - 14:32 | 2480671 MeanReversion
MeanReversion's picture

The Germans do not trust money going into Greece period. It doesn't matter what it's for because the perception is that the money will go to waste because the Greeks are not to be trusted, unless the Germans are actually doing the feeding and injecting the medicine themselves, by hand. in this case, perception trumps reality.

Thu, 05/31/2012 - 14:00 | 2480500 mayhem_korner
mayhem_korner's picture

 

 

The Lord of the Flies movie is coming to real life.  Time to pop some corn.

Thu, 05/31/2012 - 14:01 | 2480505 drink or die
drink or die's picture

New bumper sticker: Don't blame me, I voted for Golden Dawn.

Thu, 05/31/2012 - 14:14 | 2480587 magpie
magpie's picture

http://www.youtube.com/watch?v=JJkFP1Xr_KI

Long way to go, starting say from 3 percent ?

Thu, 05/31/2012 - 14:03 | 2480516 Robot Traders Mom
Robot Traders Mom's picture

Jan 14 Leaps on TBT just spiked.

 

Any ideas @ Tyler?

Thu, 05/31/2012 - 14:05 | 2480533 semperfi
semperfi's picture

RTM,  your picture scares me !!!

Thu, 05/31/2012 - 14:31 | 2480663 Robot Traders Mom
Robot Traders Mom's picture

Well Marine, looks like you are my doppleganger!

Thu, 05/31/2012 - 14:02 | 2480518 Gringo Viejo
Gringo Viejo's picture

Elections, like Markets, are rig jobs. Grow up!

Thu, 05/31/2012 - 14:03 | 2480522 semperfi
semperfi's picture

"the outcome of this second election remains highly uncertain"

Quite the contrary, IT IS CERTAIN:  CHAOS    &   ANARCHY !!!

You can take that to the bank$$$.

Thu, 05/31/2012 - 14:04 | 2480523 crawldaddy
crawldaddy's picture

bullshit, the LIKLEY outcome is what just happened. No govt is formed.

Thu, 05/31/2012 - 14:07 | 2480540 LawsofPhysics
LawsofPhysics's picture

The bottom line for the world; clear the bad debt and restore the rule of law and contracts or watch all the paper burn.  Any questions? Imperial credits are no longer being accepted.

 

http://www.youtube.com/watch?v=skv3wSIL5xI

 

Thu, 05/31/2012 - 16:39 | 2481098 Ghordius
Ghordius's picture

as long as the imperial legions are functioning, the imperial credit will be accepted

as long as the imperial credit is accepted, the imperial legion function

Thu, 05/31/2012 - 14:06 | 2480544 FinalCollapse
FinalCollapse's picture

Syriza will not get the extra 50 parliament seats when it wins. The Greek law awards the extra 50 seats to the winning registered party. Syriza is not a registered party, it is a coalition. The are considering to register as a single party now.

Thu, 05/31/2012 - 14:14 | 2480583 MeanReversion
MeanReversion's picture

It IS a registered party. This was as of a week ago.

Thu, 05/31/2012 - 14:13 | 2480576 BandGap
BandGap's picture

It doesn't matter. Really, think about it. They aren't going to take austerity seriously, and they certainly aren't going to pay taxes. It's like getting your alcoholic brother-in-law a job. It won't last long but at least you can say you tried.

Thu, 05/31/2012 - 14:15 | 2480592 John Law Lives
John Law Lives's picture

Look for pundits to yell and scream that Greece's departure from the euro zone would be catastrophic.  This is playing out just like when Hank Paulson demanded TARP by trying to scare people to death.

100% FUBAR.

Thu, 05/31/2012 - 14:16 | 2480595 SheepDog-One
SheepDog-One's picture

Golden Dawn has the best flag so I want them to win.

Thu, 05/31/2012 - 14:34 | 2480674 BandGap
BandGap's picture

I have a Golden Flag Shower Curtain.

Thu, 05/31/2012 - 14:49 | 2480719 CommunityStandard
CommunityStandard's picture

For golden showers?

Thu, 05/31/2012 - 14:16 | 2480597 Sandmann
Sandmann's picture

I think Americans are funny...so legalistic and conformist. The situation in Greece is fundamental like that first shot at Fort Sumter....whatever the election result it will not be able to focus the Anger of the Voters. Violence is what lies ahead.

Thu, 05/31/2012 - 14:36 | 2480680 BandGap
BandGap's picture

Precisely, the control point is way back there somewhere. Quite possibly there never were controls for this, because after all, this is itty bitty Greece.

No matter who "wins" the elections, the fistfights will start immediately.

Thu, 05/31/2012 - 14:16 | 2480599 Whoa Dammit
Whoa Dammit's picture

If Morgan Stanley is against Syriza, then Syriza must be pretty much of a good thing for Greece.

Thu, 05/31/2012 - 14:17 | 2480601 timbo_em
timbo_em's picture

Scenario 4 could have happened after the first round of elections but ND and PASOK insisted that SYRIZA must be part of the new government. I assume because ND and PASOK were afraid that SYRIZA would gather more support as an opposition party because they would attack every single move of the new government.

And since even the two parties that so far reluctantly supported austerity are totally against austerity and since Greece is nowhere near meeting its deficit targets (lack of revenue, too much spending and no structural reforms), I think it's far more important what happens in Berlin, Vienna, the Hague and Helsinki.

Thu, 05/31/2012 - 14:18 | 2480609 SmoothCoolSmoke
SmoothCoolSmoke's picture

I thnk the most likely outcome this time is the one the Banksters want.  They took their eye off the ball last time.  That said, to hell with them!

Thu, 05/31/2012 - 14:19 | 2480614 Negro Primero
Negro Primero's picture

Europe = Dodge City

"With Greece, we really only have two possible outcomes:

1 – Greece stays in the Euro-zone and continues to receive bailouts. The problem with this is that practically all of the bailout money received is quickly paid back to bond investors who just so happen to be European financial institutions. The only thing the average Greek receives is the privilege to pay higher taxes from the salary they no longer receive. Brussels is effectively telling Greece, the bullying will stop as soon as the morale improves.

2 – Greece leaves the Euro-zone and defaults on its debt. Here, the institutions who lent money to Greece will lose money and justifiably so. Everyone else in the World (who isn’t a bank), always takes losses when they make a bad investment, Greek bond holders including the IMF, ECB and EU should be no exception.

With outcome # 2, Greece will certainly enter a recession – yet, since they are currently in a depression it will actually be an upgrade from their current state."

... more from this recent analysis here:

http://www.icecapassetmanagement.com/uploads/documents/IceCapAssetManage...

Thu, 05/31/2012 - 14:22 | 2480636 Pancho Villa
Pancho Villa's picture

A roll of the dice. Except that the dice might just roll off the edge of the table and would need to be rolled still another time. What happens if no party is able to form a government after this election?

Even if a pro-euro government comes to power, implementing austerity would make it so unpopular that it would soon be thrown out. It would need to fire government employees or at least cut their pay and pensions severely. So the ultimate outcome is not in doubt. It is just a question of whether they can manage to kick the can one more time.

Looks like a long hot summer in Athens as well as Madrid.

Thu, 05/31/2012 - 14:23 | 2480640 youngman
youngman's picture

I think the military will want to party....if things get itchy

Thu, 05/31/2012 - 14:25 | 2480647 SonOfSoros
SonOfSoros's picture

Doesn't matter what those dumb Greeks decide to do as long as us traders can profit from their stupidity. 

But for the sake of themselves, I hope they know and VOTE for what is best for them. 

Thu, 05/31/2012 - 15:39 | 2480905 slewie the pi-rat
slewie the pi-rat's picture

greece does not need a goobermint till angela speaketh

then, antonioSam (w/ gPap's V-man) will lead, if her thumb is up; 

thumbs down?  syriZZa leads the goobermint but teams up w/ND + P to do so;  aSam & gPap ain't gonna sit out either dance at this point, imo;  this is greece and these two college roomates' parties are the biggest heavyweight fighter in these islands (teamed)

and slewie always holds out the best to greece for a fab future:  fuk the EU!  become part of the USA!  youse ain't seen nuttin yet! (taiwan too, of course)

we might as well get something out all these damned crises for thePeople, doncha think, BiCheZ?

forget planA;  screw planB;  arc planC into the basket for 3;  go with planZ!  hee hee

Thu, 05/31/2012 - 16:36 | 2481089 penexpers
penexpers's picture

Seriously, MS can go fuck themselves...

Any one of MS's proposed outcomes that involves New Democracy or PASOK calling the shots is considered a "positive" for investors.

Greek needs to tell the IMF, EU and ECB to fuck off once and for all.

 

Thu, 05/31/2012 - 17:23 | 2481229 shovelhead
shovelhead's picture

I predict Riot Dog has a busy summer no matter who is elected.

Thu, 05/31/2012 - 23:21 | 2482417 dodos26
dodos26's picture

We all know that the money that IMF and EU are giving to Greece,don't actually go to Greece. Our lenders are funding themselves. We take € as loans and give them as interest..

With or without the bailout, Greece is doomed in an endless spiral of austerity and poverty. And what is the solution? More taxes! More austerity measures!

The whole purpose of this hide and seek game is to provide the best protection for the bankers and investors.

And to exaggerate a little bit, if you kill all the poor and unemployed people, does this mean that you found the solution to poverty and unemployment?

Fri, 06/01/2012 - 03:55 | 2482739 RagnarDanneskjold
RagnarDanneskjold's picture

Invite Golden Dawn into the government and say the only goal of the government is to deal with the crisis. There may be new elections within a few months, but Syriza would gain stature for acting like a leader and bringing the nation together. If left-wing parties defected, Syriza would pick up their voters and could slam them for acting against Greek interests. Plus, saying they'll let Golden Dawn join will scare the @#$% out of Europe. One more bargaining chip for Greece.

Fri, 06/01/2012 - 07:15 | 2482960 nicxios
nicxios's picture

The election polls prior to the April elections got it all wrong. For example, they had Syriza a distant 4th; Golden Dawn not even mustering 3% to make into Parliament. The current polls are just as fraudulent. One was paid for by TV channel MEGA--a known propaganda machine pushing the 'memorandum-as-savior-of-Greece' line--and of course ND was comfortably ahead with Pasok a steady 3rd.

I reckon ND and Pasok are dead. There are lots of signs. Democratic Left has come out and said they will not under any circumstances form a governent with Samaras(ND) and Venizelos(Pasok). I'm trying to figure out what angle Kouvelis is playing here. What is there to gain to do this 3 weeks before the election? Unless...unless Kouvelis knows the REAL information that ND/Pasok are dying and wants to ride the coattails of Tsipras and Syriza.

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