Tuesday, May 08, 2012

Squaring the circle - Radical Left's Alexis Tsipras takes turn at forming new Greek government

Αλεξης Τσιπρας/ Alexis Tsipras by Teacher Dude's BBQ

Well, one of my predictions bit the dust. The possibility that New Democracy would work with Independent Greeks was nixed yesterday when Panos Kammenos refused even to meet with New Democracy leader, Antonis Samaras. Now it's the turn of the leader of the Radical Left coalition party (SYRIZA), Alexis Tsipras to try and form a government. After today's meeting with the president of Greece at 2pm he will have 72 hours to forge a coalition. 

At first glance this seems an uphill task given the fact that the Greek Communist party (KKE) has ruled out any possible deal and without their 26 seats getting a 151 seat majority just from the left went from being difficult to being  impossible.Even if KKE's leader Aleka Papariga had agreed, the presence of members of PASOK once again in government would have caused enormous problems both within parliament and with the electorate at large who sent a very clear message that they do not want more of the same.

Aleka Papariga, leader of KKE - The Cummunist Party of Greece

So what's left? One rumour doing the rounds of the Greek language twittersphere is that a quick and dirty coalition of PASOK, Independent Greeks, SYRIZA and Democratic Alliance would form a short term government to repeal the election law that gives leading party an extra 50 seats in parliament and then announce new national elections with a more level playing field.

However, this is just a rumour and I believe the most likely outcome will be Tspiras announcing that a new government cannot be formed in which case the task falls to PASOK leader Evengelos Venizlos who is likely to have even less luck.

Evangelos Venizelos addressing rally. Thessaloniki, Greece

So its seems that new elections will be held once more with the 10th or 17th June being mentioned as the most likely dates. It will be interesting to see if they produce radically different results to the previous ones. Equally interesting will be how this affects the next round of measures required by Greece's creditors in return for the latest bailout installment. If Athens is not in a position to implement the tax hikes and job cuts being demanded will the money be withheld? With government revenues falling all the time what happens to the real economy and the stability of the Eurozone as markets get ready for a possible knock on effect in Spain, Italy and Portugal. 

In such a case will the EZ's firewall be enough?

EZ firewall - Please take one.

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