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Goldman On The Greek Elections

Tyler Durden's picture




 

Yesterday, Greek Prime Minister Papademos visited President Papoulias to announce the dissolution of the current parliament. General elections have been called for the May 6. Elections in Greece are held in a one-round national ballot. In a brief note on the actions and implications of the Greek election, Goldman notes that the Greek political scene is undergoing a significant transformation. The traditional split between center-left (PASOK) and center-right (New Democracy, or ND)) is no longer the key dilemma for Greek voters. According to a number of recent polls, there is a significant margin of undecided voters. In addition, a number of small and new parties are projected to enter the new parliament. This has created market concerns that the Greek elections could lead to an anti-Euro government, which could interrupt the adjustment efforts underway and create risks to local financial stability.

 

Goldman Sachs: General Elections Called in Greece

Yesterday, Greek Prime Minister Papademos visited President Papoulias to announce the dissolution of the current parliament. General elections have been called for the May 6.

Elections in Greece are held in a one-round national ballot. The parties that manage to gather more than 3% of the votes are allowed to occupy seats in parliament. After the ballot, the President will call the leader of the party with the most parliament seats to form a government that is supported by at least 151 votes (from a total of 300) in the new parliament in a vote of confidence.

The electoral system in Greece supports the formation of stable majorities, in principle. First off, there is a 50-seat bonus to the leading party (again out of 300), which makes it easier for the leading party to gather enough support to form a stable government (in a coalition perhaps). In addition, should a large number of parties emerge that gather significant percentages in the ballot but fail to cross the threshold for entering the parliament, then the first party will gather even more parliament seats for the same amount of votes.

Pro-austerity Coalition Government is the Most Likely Outcome

As we wrote in a recent daily (Greece Post PSI, March 9, 2012), the Greek political scene is undergoing a significant transformation. The traditional split between centre-left (PASOK) and centre-right (New Democracy, or ND)) is no longer the key dilemma for Greek voters. The unconditional support that PASOK and ND have exhibited towards the coalition government under PM Papademos has created a fresh split between the parties willing to carry the political cost of austerity in order for Greece to stay in the Euro and those that are either ambiguously positioned on the subject or outright anti-Europe.

According to several opinion polls, public discomfort with the mishaps of the governments the two major parties have formed over the last decade has led to a significant decline in their popularity and poll performance. Whereas in the past PASOK and ND jointly polled at about 70-80%, their joint polling rates have declined to about 30-40%. According to a number of recent polls, there is a significant margin of undecided voters. In addition, a number of small and new parties are projected to enter the new parliament.

This has created market concerns that the Greek elections could lead to an anti-Euro government, which could interrupt the adjustment efforts underway and create risks to local financial stability. We think this is unlikely for the following reasons:

  1. Given the electoral law described above, even under current polling rates, the two leading parties (PASOK and ND) would likely gather enough parliamentary votes (>151) to form a majority government jointly.
  2. The opposition parties are plentiful but fragmented. There are stark ideological differences among the parties of the left – and much more so between those of the far left and the far right. The agendas and the pursuits are very different, as are the positions on EMU participation. The probability that the opposition parties form a stable and coherent coalition of their own is fairly low, in our view.
  3. Polling companies continue to warn that the high percentage of undecided voters creates a wide margin of error around current polls. Given the high public support for the EUR (typically north of 60% in past surveys), the current polls probably understate the actual ballot results for PASOK and ND (the parties most clearly pro-EUR).

What Follows the Election Will Be More Important to Watch

What follows the elections will be key to watch for Greece. The significant economic challenges ahead will require that the next government enacts and applies legislation targeted mainly towards: 1) spending cuts; and 2) structural reforms such as deregulation of product and labor markets. These are also the priorities of the new EU/IMF adjustment program for the three years ahead.

The success of any coalition formation and the long-term political stability of Greece will heavily depend on the capacity of the Greek government to efficiently apply these budgetary and structural reforms going forward. Thus, even if a pro-Euro coalition emerges, the support of participant parties towards the reform process will need to be resolute. Immediately following the elections, we identify three signals as to whether the new government enjoys such a support:

  1. If indeed a pro-Euro coalition government emerges, the government will need to be backed by a comfortable majority. For Greek parliament’s standards, this typically means a parliamentary majority north of 160 seats.
  2. The members of the new government would need to be experienced individuals, with strong technical background, reform-oriented mindset, and broader credibility.
  3. The new government’s program goals (laid out at the confidence vote) should be specific and not create areas of conflict with the currently voted adjustment program.
 

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Thu, 04/12/2012 - 10:40 | 2337760 idea_hamster
idea_hamster's picture

Goldman On The Greek Elections

...because, well, they'd know!

I, for one, welcome our new squid overlords.

Thu, 04/12/2012 - 10:45 | 2337795 GetZeeGold
GetZeeGold's picture

 

 

Goldman's just chiming in on everything today.

 

Thu, 04/12/2012 - 10:58 | 2337857 Manthong
Manthong's picture

Everything about Greece and the EU is a fraud that they will manipulate until it all collapses, so why does this matter now?

Thu, 04/12/2012 - 10:56 | 2337847 MillionDollarBonus_
MillionDollarBonus_'s picture

Contrary to what many libertarians say, the Greek people are NOT responsible for the debt. They weren't voting for increased debt over the last two decades; just increased benefits. They had no idea that these were being paid for with debt - they only found this out recently. It would be beyond their responsibility to have an understanding of the budget and what some future generation will be paying 20-30 years later. So mean libertarians should lay off a little in my opinion.

Thu, 04/12/2012 - 13:07 | 2338513 Umh
Umh's picture

You make the Greeks sound just like the Democrats and Republicans in the U.S.

Thu, 04/12/2012 - 14:04 | 2338721 Elorant
Elorant's picture

As a greek I can assure you we had pretty good idea. There is a yearly report published by the central bank of Greece which for the last 15 years painted a very dark picture of our national finance. The problem is that we chose to ignore the facts because they were inconvenient.

Thu, 04/12/2012 - 16:44 | 2339337 BarberKen19
BarberKen19's picture

my neighbor's mom makes $82 hourly on the computer. She has been out of a job for ten months but last month her pay check was $14998 just working on the computer for a few hours. Read more on this web site and click Home .....  WWW.LAZYCASH.COM

Thu, 04/12/2012 - 12:04 | 2338252 TheGardener
TheGardener's picture

Judged by past performance of paying for foreign affairs that were important to us, should be easy to buy off this election. Few million voters, pork only with all but a few soon destitute. Angry mob all over the place if we do or don`t. Time for more socialists then , we only might run out
of colors

Thu, 04/12/2012 - 10:39 | 2337765 slewie the pi rat
slewie the pi rat's picture

First off, there is a 50-seat bonus

Thu, 04/12/2012 - 12:23 | 2338352 Ghordius
Ghordius's picture

well, I do prefer multiparty parliaments to first-around-the-post arrangements, but it's a "fad" since twenty years in europe to "award" the party with the highest turnout a seat bonus. somehow the British and American comments about non-governability grated...

slewie, something you might like: in Greece, even prisoners vote.

Thu, 04/12/2012 - 15:10 | 2338961 Likstane
Likstane's picture

Isn't this the fake slewie?

Thu, 04/12/2012 - 10:44 | 2337792 JailBank
JailBank's picture

Where is the Pro-Eff-U-Goldman party? Default, get off the euro, get back to somewhat helathy economy. Take the pain.

Thu, 04/12/2012 - 12:05 | 2338248 Ghordius
Ghordius's picture

there is one greek party that is of this opinion (get off the euro and default). It's the KKE, the Hellenic Communist Party. The question though is what communist define as healthy economy.

otherwise, the squiddie is right (they can't bullshit all the time, can they?), over 60% of Greeks don't want to get off the euro, and this across nearly all parties with a chance of scoring the 3% electoral vote needed for parliamentary seats.

Thu, 04/12/2012 - 12:23 | 2338350 TheGardener
TheGardener's picture

If I were a pro EURO troll like you, I would do it the conman`s way. First gather CON-fidence and than splatter my pro EURO trash. You did well and I appreciated lot`s of your
remarks even though had you on watch.

Since you obviously are 't stupid, you must be doing that for a living.

P.S. just the other day you scored well with that evil resident of your place of abode

Thu, 04/12/2012 - 12:30 | 2338368 Ghordius
Ghordius's picture

then tell me which major or medium Greek party is going against the euro-stuff. bring some facts, with links

the only I know is the Communist - and this is a fact that they want to get out of the euro

should I note that I don't see me as a troll? I just hate propaganda. particularly bankster's propaganda. btw, not me junking you

-----

perhaps I am a troll: an Anti-CDS troll. BAN THAT HIDEOUS STUFF. STOP BANKSTERS PLAYING CASINO WITH OUR MONEY

Thu, 04/12/2012 - 12:45 | 2338457 TheGardener
TheGardener's picture

I `ll take the troll back and even half of the con-thing.

May I double up on your intellectual anti-propaganda capacity and still keep an eye on you ?

Fri, 04/13/2012 - 02:31 | 2340848 Ghordius
Ghordius's picture

well, bless you and your uncommon and exemplary politeness

Thu, 04/12/2012 - 10:46 | 2337801 AcidRastaHead
AcidRastaHead's picture

This genius insight of political uncertainty in Greece is for what purpose?  Who the hell is investing in Greece these days other than the ECB.  Even the muppets have caught on to this.

Thu, 04/12/2012 - 11:06 | 2337907 CrashisOptimistic
CrashisOptimistic's picture

To a significant extent, it doesn't matter who is investing in Greece.  

What matters is if Greece abandons their commitment to austerity.  If that happens it becomes a template for all, not just some, ALL others.  

And there is the rather considerable reality that the debt swap was PSI only.  If they have to default on more debt, it will be ECB and IMF loans that aren't repaid.

The IMF is ALWAYS repaid.  This would be a precedent that disintegrates IMF funding.

Thu, 04/12/2012 - 10:48 | 2337812 Schmuck Raker
Schmuck Raker's picture

Thte vampire thquid thpeakths.

Thu, 04/12/2012 - 10:49 | 2337817 milanitaly
milanitaly's picture

Will Goldman and ECB change the new government if not "Pro-Euro"?  I think yes

 

 

Thu, 04/12/2012 - 10:55 | 2337851 Pacifico
Pacifico's picture

Dammit I'm losing track of all those G-PAP!

Head's up to Venizelos, that guy is fairly easy to spot!

Thu, 04/12/2012 - 10:58 | 2337859 Bicycle Repairman
Bicycle Repairman's picture

"This has created market concerns that the Greek elections could lead to an anti-Euro government"

Any time the Lisbon treaty was presented to the people for a vote anywhere in Europe, it was defeated.  The people did not, do not and will not want this union.  As it turns out they were right.

Thu, 04/12/2012 - 12:13 | 2338157 Ghordius
Ghordius's picture

probably you even believe this BULLSHIT that is cursing around the net - still, sorry, it's pure BS

"Any time the Lisbon treaty was presented to the people for a vote anywhere in Europe, it was defeated"

for example Ireland: on October 2009, 1.2 million voted YES, 0.5 million voted NO - 67% for the Lisbon Treaty and the XXVIII Amendment to the Irish Constitution that was needed for it. And this with a voter turnout of 59% (3 million eligible voters). And of course parliament voted yes.

here http://www.rte.ie/news/2009/1003/eulisbon1.html and here http://www.time.com/time/world/article/0,8599,1927731,00.html

Unbelievable, this anti-euro propaganda, it creeps everywhere...

Thu, 04/12/2012 - 17:07 | 2339409 smiler03
smiler03's picture

I agree with you that "Any time the Lisbon treaty was presented to the people for a vote anywhere in Europe, it was defeated" is a typical piece of ignorant rubbish as seen very frequently on ZH. But....

You're only telling half the story on the Irish vote. It was initially rejected in a referendum in June 2008 by 53.4% NO 46.6% YES, turnout 53.1%.

http://en.wikipedia.org/wiki/Twenty-eighth_Amendment_of_the_Constitution_Bill,_2008_(Ireland)

The proposed European Constitution was also initially rejected by France and the Netherlands in 2005, because of the rejection it could not be ratified and it morphed eventually into the Treaty of Lisbon.

Also worthy of note was the influence of the Prime Fascist of the UK, also known as Gordon Brown whose Labour Party had promised to hold a referendum on the treaty. Being a person with no moral fibre Brown ratified the treaty without the promised referendum. Who knows what would have happened with the substantial UK EU skeptic voters.

Fri, 04/13/2012 - 03:05 | 2340868 Ghordius
Ghordius's picture

bless you too, smiler03 - yes, I am aware that it's a half-truth - though it's IMHO the correct/non-misrepresenting half-truth (for a short comment). First a lukewarm no, then a resounding yes in Ireland. I'd wish some Irish that voted this way would explain it better than me - what I know is that the english-speaking press is usually only representing the incorrect half-truth, and this is infiltrating the psyche of the Anglosphere web.

Perhaps I should note that I would have voted no to the european constitution (nice but unnecessary) - I prefer the "club of cooperating sovereigns" principle to a confederation and a confederation to a federation,  though I accept the Treaty of Lisbon as a useful compromise between the two directions. So I am quite sympathetic with all europeans that are quite undecided on those matters. And all in all the referendums were very useful, IMO, and shaped the discussion in the right way. For me, Switzerland is still the shining example of direct democracy (a confederation, by the way).

(Socialist) PM Gordon Brown and all politicians that promise a referendum and don't deliver are for me traitors, not to their country but to the democratic principles. The last UK referendum was 1975 and at that time it was still called the ECC - arguably a different organisation. It would be time for the British People to realize that they should not make only Brussels accountable, some of their grievances are to be addressed in the direction of Westminster. A British referendum would be a nice thing - but this is a British internal national issue, isn't it?

Thu, 04/12/2012 - 11:01 | 2337875 LowProfile
LowProfile's picture

 

This has created market concerns that the Greek elections could lead to an anti-Euro government, which could interrupt the adjustment efforts underway and create risks to local financial stability.

...Greece currently has financial stability?

Thu, 04/12/2012 - 11:01 | 2337876 Dick Darlington
Dick Darlington's picture

This has created market concerns that the Greek elections could lead to an anti-Euro government, which could interrupt the adjustment efforts underway and create risks to local financial stability

Aaahahahahahahahahahahahahahaaaa (breathe) aaahahahahahahahaaaa (breathe) aaahahahahahahahaaa!

Thu, 04/12/2012 - 11:04 | 2337894 youngman
youngman's picture

I for one would not want to be a Greek Politician ...at any price...

Thu, 04/12/2012 - 11:17 | 2337967 Bag Of Meat
Bag Of Meat's picture

Would an anti-Euro government have an impact on the global economy? Or are the firewalls ready and set?

Thu, 04/12/2012 - 11:22 | 2338001 agent default
agent default's picture

This looks more like a referendum more than anything else.  If the two pro austerity parties don't capture more than 50% of the vote combined, there is no legitimacy for the implementation of the troika policies. 

Thu, 04/12/2012 - 11:30 | 2338042 carguym14
carguym14's picture

Hmmm,yeah I wonder how the people will vote-free skittles or pain?

 

Same here in the U.S.-how many will vote for the person that's gonna take something away??

Thu, 04/12/2012 - 11:38 | 2338091 Stuck on Zero
Stuck on Zero's picture

It seems every "democratic" country in the world has two leading political parties: the liberal statist power run by bankers and the concervative statist party run by bankers. 

Thu, 04/12/2012 - 13:03 | 2338505 TheGardener
TheGardener's picture

Any democratic-able country has a choice but one : how to control the demos. They are free in a sense by the way about how they have choosen leaders and creative how they obtained the majorities needed or not.

Thu, 04/12/2012 - 11:45 | 2338134 sitenine
sitenine's picture

Goldman: "Elections? No. We can't do that. That fucks up the plan."

Thu, 04/12/2012 - 12:40 | 2338165 agent default
agent default's picture

I think this election will make Diebold look positively honest

Thu, 04/12/2012 - 17:11 | 2339428 smiler03
smiler03's picture

Don't judge European elections by the fraudulent joke of a system the US uses.

Thu, 04/12/2012 - 12:01 | 2338230 Savvy
Savvy's picture

Check this shit out.

 

Greece is offering a ‘cop-for-hire’ service, renting out policemen for €30 per hour, plus €10 if you want a police car too. It triggered fears that security of people who cannot afford a policeman for hire may be affected in favor of those who can.

This new way for the cash-strapped Greek state to raise money will "pay for the cost of using police materials and infrastructure, and allow to modernize them", the Ministry of Citizen Protection said in a statement.

http://rt.com/news/greece-police-for-hire-689/

 

 

Thu, 04/12/2012 - 12:18 | 2338326 Bag Of Meat
Bag Of Meat's picture

TD has posted about this... good luck to all greeks (including me)

Thu, 04/12/2012 - 12:27 | 2338371 BlueDonkey
BlueDonkey's picture

Like Ron Paul, Panos Kammenos and the Independent Greeks are getting sidelined in the media here.   However, the Independent Greeks Party has a great chance from my unscientific polling of the locals.   He is ant NWO  he will only pay back the debt we owe 130B and the rest he will piss on.  He will jail people like G-pap and the other fuckers who screwed up the country.  People are mad and the coalition traitors will pay.    Lehman will look like a hay ride if he gets in so watch closely and buckle up.

 

 

Thu, 04/12/2012 - 14:47 | 2338771 Bag Of Meat
Bag Of Meat's picture

puppets

Thu, 04/12/2012 - 13:27 | 2338588 carbonmutant
carbonmutant's picture

Will the Greeks be allowed to hold a referendum...?

Thu, 04/12/2012 - 17:22 | 2339465 smiler03
smiler03's picture

Interesting question.

George Papandreou of course "threatened" to hold one back in November 2011 so we know that they can take place. On that occasion the Troika shat themselves in unison and forced the backdown. The composition of the new Parliament will be the key. From what I can judge of the Greek population though, there would be an overwhelming decision to keep the status quo. They too are shitting themselves in fear of losing the precious Euro. Ha Ha!

Thu, 04/12/2012 - 13:49 | 2338670 Olympia
Olympia's picture

Imperialism and loansharking are perfectly identified ...identified, exactly as imperialism used to be identified with war conflicts. This is why we believe that the consequences of some “mistakes” easily reveal the “motives” of those who planned them.

In reality, there is a permanent “recycling” of the same tactics that lead to the mistake and then to disaster. The method used in the case of Greece is a version of the practice that started from the imperialistic centers to expand all over the world. Simply, in Greece, that is a “terminal”, banking illegal superprofits were produced so that loan sharks “spoil” the Greek public assets, while at the “center” of the planning banking superprofits were created so that loan sharks “spoil” the "Greeces”. Exactly the same illegal things were planned to bring profit to their loan sharking inspirators ...illegal profits.

More info about Global Debt Crisis here:

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html

.

Thu, 04/12/2012 - 14:21 | 2338778 miltiadis
miltiadis's picture

Even in a post like this i see that 90% of the comments are off-topic.

As For Greece if someone cares PASOK will be #2 and Nea Dimokratia #1 in summary #1 will be #2 and #2 #1 even if they have lost 50% of their power according to polls before elections

Thu, 04/12/2012 - 15:10 | 2338966 monsi
monsi's picture

Beware a European bearing gifts........Monsistotolis 3 AD

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