Tic, tac, tic, tac. The Greek election day is here. While we await the results, we present you some thoughts by Azizonomics.
The world’s eyes are on the Greek election, and whether or not Greeks will elect New Democracy’s Samaris (widely-assumed to be pro-bailout, pro-status quo), or SYRIZA’s Tsipras (widely-assumed to be anti-bailout, anti-status quo).
The Eurocrats have very sternly warned Greece against voting against austerity. Merkel said:
It is extremely important for Greeks to elect lawmakers who would respect the terms of the bailout.
In recent days, opinion has swung back toward the status quo, with Intrade rating New Democracy’s chances of winning the largest number of seats at 65%, and SYRIZA at just 33%.
While I cannot rule out New Democracy winning, I think that I’d flip those odds. Greece widely reviles German-imposed austerity, but fears the consequences of leaving the Euro — 85% of Greeks want to stay in. A vote for New Democracy would reflect fear of Drachmatization. Meanwhile, a vote for SYRIZA would seem to reflect the idea that through brinkmanship and the threat of Euro collapse, Greece can negotiate their way to a much more favourable bailout position.
So why do I think SYRIZA are the likelier winner? The election is on a knife-edge, so I think the difference might be football.