MISH'S
Global Economic
Trend Analysis

Recent Posts

Sunday, August 30, 2015 10:16 PM


Greek Snap Election Confusion; Tsipras' Questionable Gamble; Unwieldy Coalition Coming Up?


Questionable Gamble

In the wake of reneging on major election promises, Greek prime minister Alexis Tsipras resigned and called for snap elections. He did so out of fear of losing a vote of confidence that would have forced the same result down the road.

In addition, Tsipras wanted the vote out of the way before further rounds of pension cuts and tax hikes took their toll on the economy.

His gamble now appears questionable.

Please consider Alexis Tsipras Rallies Supporters as Syriza Takes Knock in Polls.

Alexis Tsipras tried to rally Syriza party members behind him at the weekend in advance of a snap election, as opinion polls reflected deepening disappointment among voters with his government’s record.

His message to the weekend meeting was undermined by infighting among senior party officials, reflecting Syriza’s disarray in the wake of mass defections last week to Popular Unity, a new radical party led by the former energy minister Panagiotis Lafazanis, according to people who were present at the event on Saturday.

In another blow to the Syriza leader’s authority, a usually loyal party faction known as the “Group of 53”, which includes several former cabinet ministers, circulated a document at the meeting sharply criticising the premier’s decision last month to make a policy “somersault” and agree to a third rescue package totalling €86bn after months of tense negotiations.

“We need to come up with a persuasive alternative plan . . . that will lead us out of the memorandum [bailout agreement],” the document said.

More than 50 members of Syriza’s central committee and 27 of its MPs, including a former deputy finance minister, have switched to Popular Unity, which is campaigning on a defiant platform that calls for a voluntary exit from the eurozone and the re-adoption of the drachma.

“Re-adopting the drachma is not a catastrophe. . . There are plenty of European countries doing well that are not members of the eurozone,” Mr Lafazanis said at the weekend.

However, Syriza is still expected to win the election by a narrow margin, according to six opinion polls published over the weekend.

All give Syriza a lead of between 1.5 and 2.5 points over the centre-right New Democracy party, marking a sharp decline from its commanding 12 to 15-point lead in June — before Athens agreed to further tax increases and spending cuts in the latest rescue package.
Unwieldy Coalition Coming Up?

US News reports New Greek election could mean new govt partners for Tsipras and his Syriza party.
Greece's outgoing prime minister, Alexis Tsipras, is banking on his popularity to win a national election next month and strengthen his grip on power after purging his radical left Syriza party of dissenters.

But as the political jostling heats up ahead of the Sept. 20 vote, it appears increasingly likely that Tsipras will have to form a new, more unwieldy coalition government — possibly with as many as three other parties.

The first major opinion poll since elections were called, published Friday in the left-leaning Efimerida ton Syntakton newspaper, showed Syriza as the most popular party, with 23 percent saying they intend to vote for it. That was down from 26 percent in early July.

The second-biggest party, the conservative New Democracy, appears to be catching up, with 19.5 percent of the intended vote, up from 15 percent in July.

Short of a majority, Tsipras would first look to renew Syriza's coalition with the Independent Greeks, a small right-wing party that had quietly backed all his policies. But in the ProRata poll, only 2 percent said they would support the Independent Greeks, below the 3 percent needed to enter Parliament.

If the Independent Greeks cannot guarantee Syriza a majority, things get more complicated.

Syriza would almost surely reject the idea of an alliance with the Popular Unity, the new party formed by its own dissidents.
Tsipras Rules Out Coalitions

Adding to the election confusion, Reuters discusses other Setback Possibilities.
Syriza would get 29 percent and New Democracy party 27.8 percent if elections were held now, a poll conducted by Metron Analysis for Parapolitika newspaper showed. The result includes undecided voters.

Another poll by the University of Macedonia for Greek Skai TV showed Syriza leading the conservative opposition by three percentage points, with 61.5 percent saying Tsipras had pursued a wrong negotiating strategy with official lenders.

Syriza would get 25.3 percent of the vote versus 23.2 percent for New Democracy party another survey by polling company Marc for Alpha TV showed.

Popular Unity, the party formed last week by Syriza rebels who oppose the bailout, was backed by 3.5 percent in the ProRata poll - above the 3 percent threshold needed to enter parliament - and 4.1 percent in the poll by Metron Analysis.

The University of Macedonia poll showed it would score 5 percent.

But the Independent Greeks, the ally in Tsipras' former coalition government, scored roughly 2 percent in three polls, meaning Syriza would be forced to seek another coalition partner.

Tsipras this week ruled out cooperating with the main pro-euro opposition parties - New Democracy, the Socialist PASOK and the centrist To Potami. The poll's result suggested that, in that event, the country would face a second round of elections.

One third of those who supported Tsipras' party in the January 2015 elections that took him into office said they were unsure if they will do so again, the ProRata poll said.

It also showed 25.5 percent of voters were still undecided, making them the biggest bloc.
Election Ploy

Ruling out cooperation with other pro-euro parties looks like an obvious election ploy.

If Tsipras sticks to his word, questionable at best in light of recent events, then he will be out of power if the polls remain as they are now. And if so, another round of elections would be necessary.

Mike "Mish" Shedlock

Last 10 Posts

Search This Blog

Loading...

Copyright 2009 Mike Shedlock. All Rights Reserved.
View My Stats