Greek election - January 25th 2015

[jaichind]

So, does the move toward Anel signal that a Grexit is more likely or less likely than first thought?

It is more to convince the Germans that they might really be crazy, in order to extract more concessions.  Not sure this will work since giving concessions to the Greeks would probably trigger demands from other beleaguered southern economies for similar relief.

[jaichind]

The more I think about it, the more I believe Tsipras knew exactly what he was doing by immediately seeking support from ANEL. This sent an immediate signal to the world that his government will take a hard and uncompromising line against austerity, and that he intends to be negotiating with Europe from a position of strength.

Yes, exactly. This election was not about gay marriage or Occupy Wall Street, it was about how hard Greece should negotiate for money from Europe. The outcome is best understood as a nationalist government. That is why they do not fear singing "we'll take Berlin", or visiting graves of the victims of German wars, which actions are inflammatory to Greece's creditors. Open and evident conflict with Europe serves SYRIZA and ANEL.

Huh? How is that inflammatory?

I think it is when it takes place on the same day that the new SYRIZA regime is saying that Germany will have to pay war reparations for WWII and that Greece should get debt forgiveness like Germany did after WWII.  By its acts and words it tries to tie the current German regime to the WWII German regime which obviously is seen as provocative by the current German government.

[jaichind]

I really don't care much if Tsipras wants to make symbolic appearences. And it's nothing to complain about either way. That said, it shows the way he wants to play and I think he overestimates his own position.

Tsipras better start getting with the picture on where he stands.  Greece must repay $5.1bn to the IMF in February and March. Tax revenues have collapsed as Greeks preempt what they hope will be a repeal of austerity taxes.   As a result the Greek government only has around $2.9bn and has spending costs of $2.5bn coming up. Somebody needs to lend the country money soon.   The Greek media reports that capital flight last week reached $15bn as it became the clear that the Syriza would win the election. Outflows of $30bn since early December, roughly 12% of GDP, most likely took place.  The European Central Bank is for now stepping into the breach. Liquidity support for Greek banks spiked to $80bn at the end of December, and is rising fast. If the ECB were to pull the plug, Greece would spiral into a systemic crisis immediately.  Tsipras needs money and he needs it now.  Going around talking about a debt write-down now is biting the hand that feeds you.  

[jaichind]

If Tsipras insist on some sort of debt write-down. I can propose a compromise (which I know there is no hope for anyway) which would be a debt-to-equity swap.  Since the Greece debt/GDP is 175% and the Eurozone limit is 60%, what we can do is to swap 115% of the 175% debt into equity.  That 115% can be swapped into shares which allow the owner of said shares to own part of the Greek economy.  Lets say 40% of the Greek economy can be swapped this way where that 115% of the debt is transformed into 40% ownership of the Greek economy.  All Greek income will be subject to an extra 2.5% tax to pay for dividends to said shareholders who can then buy and sell these shares.  What is good about this setup are that these shareholders will do everything possible to push up Greek income instead of just pushing the Greek government for more austerity so their debt can be repaid.  They can even end up helping and pushing for (I cannot believe I am saying this) the Greek government to reduce the size of the black economy so to overcome tax avoidance since that will only increase their dividends.  Overtime as the Greek economy recovers the Greek government can even start buying back these shares from the market.  You have to get the current debt-holders to have an economic incentive to get help grow the Greek economy.  

[jaichind]

Gotta love how this guy manage to spin the fact that anti-austerity forces enjoy a 12-point advantage over pro-austerity ones in the Greek electorate into an indication that Europe "should not be afraid of standing up to the new Athens coalition".

The Greek people have spoken, and the results are clear to even the most stubborn hack.

What factual aspect of this person's write-up do you disagree with ? I happen to agree with the facts a lot.  My view election night as the results came in

Looking at the results so far it seems this election is mostly about DIMAR-Green and ANEL vote from June 2012 going to SYRIZA.  Other than that it is mostly small shifts of the same votes between various similar parties  (like PASOK ->  KIDISO and River)

Pretty much matches what this guy wrote.  It seem to me what took place was a consolidation of the anti-austerity majority around SYRIZA in 2015 where as it was splintered in June 2012.  I guess on part I disagree with this person on is that DIMAR should not really be considered anti-austerity in June 2012 but its vote base for sure swung to an anti-austerity position in 2015.  In that sense something did change.