The new general election will secure Greece’s position in Eurozone; at least for some time

Alexis Tsipras, the Greek Prime Minister, leaving the European Parliament plenary in Strasbourg after delivering a speech. He was strongly criticized by some MEPs for his decision to hold a referendum on 5 July on the bailout terms for the country’s sovereign debt crisis but others praised him for that. (European Commission Audiovisual Services, Date: 07/07/2015).

Alexis Tsipras, the Greek Prime Minister, leaving the European Parliament plenary in Strasbourg after delivering a speech. He was strongly criticized by some MEPs for his decision to hold a referendum on 5 July on the bailout terms for the country’s sovereign debt crisis but others praised him for that. (European Commission Audiovisual Services,
Date: 07/07/2015).

The very next day that the Greek government signed a three year Memorandum of Understanding (MoU) for a new stability support program of €86 billion with the European Commission, Prime Minister Alexis Tsipras triggered an early legislative election. To do this he had to resign and according to the constitution, the President of the Republic has to separately and successively mandate the second and the third largest parliamentary party to form a new government. Quite predictably this will prove impossible and the country will have to hold a general election on 20 or 27 September.

25 deputies left SYRIZA

Today the President of the Republic is expected to ask the third largest Parliamentary party the ‘Popular Unity’ to form a government. This political formation is a last minute arrival and is made of by 25 deputies who abandoned the governing SYRIZA exactly because this party under Tsipras signed the MoU with the European Union. In doing this the 25 deputies left the government in the air without a Parliamentary majority. They propose that the country should abandon the euro area and possibly the EU altogether, denounce its foreign debts, introduce a national currency, the new drachma, and search for a wider strategic alliance with non Western countries like the BRICS (Brazil, Russia, India, China, South Africa), Venezuela, Argentina and other dubious allies. To be noted, that the BRICS have never invited Greece to join their New Development Bank (NDB).

During the past few weeks all the 25 and some more have voted down in Parliament Tsipras’ choices to accept the harsh terms of the third MoU which the country signed with its creditors in order to stay in the Eurozone and continue using the euro. The President of ‘Popular Unity’, Panagiotis Lafazanis, is a back room gray personality who has been steadily opposing Tsipras’ leadership in SYRIZA. All along the past months, even before the 25 January election that brought SYRIZA to power, this left wing collection of groupings, lacked a common vision about their political goals nor did they share a collective ideological identity.

Can Tsipras do it again?

Now, after this group of extreme left wingers abandoned SYRIZA the party is becoming much more manageable and the power of its President Tsipras is not contested seriously any more. By the same token, SYRIZA becomes an option for a much wider spectrum of voters ranging from the left to center and even the center right. After the partitioning of the 25 extreme left-wingers, SYRIZA is now shifting in full towards the center closing in fast towards the social democratic part of the political spectrum. Predictably, this hasty transition will greatly increase its audience. Together with the general resentment against the two old parties, New Democracy (center right) and the socialist PASOK, which alternately governed the country for the last forty years, Tsipras can logically expect a new victory in the coming election.

His problem will be though that he may not gain an absolute majority in a house of 300. In such a case he may need one or more parties to form a coalition government. But then again there will be no shortage of volunteers. Practically all the political parties that support the Eurozone option for the country will be available to cooperate. Not to forget that it was with their votes in the Parliament that Tsipras could pass all the latest harsh conditions in order to keep Greece inside the Eurozone.

A three year support

To this effect, the European Stability Mechanism (ESM), Europe’s firewall established in 2012 in response to the global financial crisis, will disburse up to €86bn in loans over the next three years, provided that the Greek authorities implement reforms to address fundamental economic and social challenges, as specified in the MoU. To be noted that all the financial needs of Greece will be covered exclusively by EU sources.

The International Monetary Fund has refrained from participating in the Greek agreement. It may join again the creditors’ lines if Athens conforms to the obligations it undertook and again only if an “explicit and concrete agreement” on a debt relief from the country’s Eurozone creditors is signed. For the time being the IMF acts as a technical advisor in the negotiations with Greece. This stance signifies a strong differentiation between Washington and Berlin vis-à-vis the Greek case and also in Eurozone’s economic policies in general.

Most need the euro

Coming back to Greece’s internal political spectrum, one finds that it is not any more compartmented only under the traditional left-center-right division. The option of staying or leaving Eurozone and possibly the European Union in general runs within the entire political horizon from end to end. The fascist Golden Down and the long-established communist party (KKE) are both adamant in supporting a Grexit, the exit from Eurozone and possibly from the EU. The new extreme left ‘Popular Unity’ formation of 25 deputies has joined this club. On the other side of the fence the rest of SYRIZA under Tsipras, New Democracy, PASOK and Potami (River) support Greece’s position in Eurozone at any cost. Those are the parties of the present Parliament though. The next election may produce more legislative parties which would attain the 3% threshold.

As things stand now in the next election the average voter will have to answer two questions. Firstly, he or she will have to decide if they want Greece to stay in Eurozone. Then they will have to choose the party which will be best placed to restart the economy and minimize the adverse effects from the new MoU Greece just agreed with the European Union. Obviously, this choice is not related only with the left or right orientation of the parties.

Predicting the results of the election

Two more factors are to decide the results of the next election. The first is Tsipras’ personal appeal to the general public. The next thing may be Lafazanis’ decision to advertise or not his convictions about the drachma. If ‘Popular Unity’ is not able to avoid the earmarking of the ‘drachma party’, the new party will not be able to heavily undercut on SYRIZA. Around 70% of the population resents the return to the drachma and more people are afraid of a singular Greek path outside the Eurozone and the EU.

It’s still a bit early perhaps to safely predict the outcome of the September vote, but SYRIZA’s first place is not disputed by many political analysts. It’s also certain that the pro-Eurozone parties will gain a large overall majority against the drachma lovers.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

European Commission: the LED lights of your Audi A6 shall save our planet

How ‘small’ is Europe in Big Data?

Cyprus Parliament says no to blackmail

Tusk fights back while charismatic Boris goes against everybody in Brussels pushing the UK to leave the EU now or never

MWC 2016 LIVE: EC adds Brazil to partner tally

IMF – World Bank meetings: US – Germany clash instituted, anti-globalization prospects visualized

The next 48 hours may change the European Union

VW emissions scandal: EU unable to protect its consumers against large multinationals

Can the national and age groups pockets of unemployment cause irreparable damages to Eurozone?

Gender Equality as a platform to improve Medicine

Russia won’t let Ukraine drift westwards in one piece

Who is responsible for public health? The tendencies and its benefits –or not– on Health Education around the world

The Commission offers exit from the EU budget stalemate

Trade protectionism and cartels threaten democracy

Trump ostracized by his party and world elites but still remains in course; how can he do it?

Europe provides financial support to African countries while Turkey denies to change terrorism laws jeopardising the EU deal

Investment, not debt, can kick-start an entrepreneurial Europe

Tsipras bewildered with Berlin’s humiliating demands; ECB expects political sign to refinance the Greek banks

IMF to teach Germany a Greek lesson

EU decides “in absentia” of civil society

A Sting Exclusive: “Infrastructure can lay the groundwork for the Sustainable Development Goals” by Mr Fulai Sheng, UN Environment Senior Economist

World Retail Congress announces Dubai 2016 Hall of Fame Inductees

Fake news and Freedom of Press: can the EU ever find the fine line?

ECB to play down IMF’s alarms for deflation danger in the EU

G20 to Germany: Abandon miser policies

Eurozone stuck in a high risk deflation area; Draghi expects further price plunge

Real EU unemployment rate at 10.2%+4.1%+4.7%: Eurostat Update

Climate negotiations on the road to a strong Paris agreement rulebook

EU continues targeting on Chinese steel imports instead of the revival of its own economy

The great challenge of the 21st century is learning to consume less. This is how we can do it

EU regional differences betray an unjust arrangement

It’s Brexit again: Nigel Farage launches a personal campaign to lead the ‘No’ front

Draghi drafts a plan to donate more money to bankers, the era of ‘money for nothin’ is flourishing

Future Forces Forum: Prague will be hosting the most important project in the field of Defence and Security

Whose interests are protected by the new Mortgage Directive?

EU Trade Ministers come together in a desperate attempt to save TTIP

JADE Spring Meeting 2017– day 1: Excellence awards, panel discussion, keynote speeches

The EU can afford to invest trillions in support of employment

EU takes again positive action on migration crisis while Turkey asks for dear favors in exchange for cooperation

A new world that demands new doctors in the fourth industrial revolution

Bankers don’t go to jail because they are more equal than us all

Neelie Kroes at the European Young Innovators Forum: Unconvention 2014

Energy Union: EU’s effort towards a cleaner climate with integrated energy market

Markets are more sensitive to Greece’s woes than Merkel

Trump badly cornered at home by agribusiness and steel consumer lobbies: Trade

G20 LIVE: “This was not an attack against France, this was an attack against the universal human values!”, EU President Juncker cries out from G20 in Antalya Turkey

G20 LIVE: “Our response needs to be robust…otherwise we will only find the fire we are trying to put out”, UN Secretary General Ban Ki-moon just lit up G20 in Antalya Turkey

The inhumane face of crisis mirrored in numbers

European Court of Justice to Google: It is #righttobeforgotten but not #righttoberemembered

Yellen and Draghi tell Trump and markets not to expedite the next crisis

Berlin cannot dictate anymore the terms for the enactment of the European Banking Union

Eurozone: Statistics don’t tell the whole story

Is Britain to sail alone in the high seas of trade wars?

The Sichuan Province of China presents its cultural treasure to the EU

EU’s Finance Ministers draft plan to raise tax bills of online giants like Google and Amazon

ECB’s unconventional monetary measures give first tangible results

COP21 Breaking News: “There is an ecological debt that the world needs to pay back to Africa”, French President Francois Hollande promises 2 Billion euros by 2020 from Paris

Can Eurozone’s uncertain growth answer the challenges that lie ahead?

Commission: Raising the social issues that can make or break the monetary union

G20 LIVE: World Leaders in Turkey for G20 Summit. Global Economy will be discussed in Antalya

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s