Greece heads to the polls after par­lia­ment blocks elec­tion of new pres­i­dent

Financial Mirror (Cyprus) - - FRONT PAGE -

Greek Prime Min­is­ter An­to­nis Sa­ma­ras an­nounced plans for an early gen­eral elec­tion on Jan­uary 25 after par­lia­ment re­jected his can­di­date for pres­i­dent on Mon­day, throw­ing the coun­try’s in­ter­na­tional bailout into doubt.

After three rounds of vot­ing, the only can­di­date in the race, for­mer Euro­pean Com­mis­sioner Stavros Di­mas, fell short of the 180 votes needed to be­come pres­i­dent, trig­ger­ing a pro­ce­dure lead­ing to the dis­so­lu­tion of par­lia­ment.

Sa­ma­ras im­me­di­ately met out­go­ing Pres­i­dent Karo­los Papou­lias on Tues­day to an­nounce the up­com­ing elec­tions and called on Greek vot­ers to en­sure sta­bil­ity was pre­served.

The prime min­is­ter told Papou­lias that the elec­tions “are against the wishes of the Greek peo­ple” and that the coun­try is headed to new ad­ven­tures.

Opin­ion polls point to a vic­tory by the rad­i­cal left­ist Syriza party, which wants to wipe out a big part of Greece’s debt, and can­cel the terms of a bailout from the Euro­pean Union and In­ter­na­tional Mon­e­tary Fund that Greece still needs to pay its bills, ac­cord­ing to a re­port on the EU news and pol­icy site EurAc­tiv.com.

“With the will of our peo­ple, in a few days bailouts tied to aus­ter­ity will be a thing of the past,” Syriza leader Alexis Tsipras said after Mon­day’s be­gun.”

The re­sult leaves fi­nan­cial mar­kets and Greece’s Euro­pean Union part­ners fac­ing weeks of un­cer­tainty that could un­der­mine frag­ile signs of eco­nomic re­cov­ery and de­rail its pub­lic fi­nances.

Syriza has held a steady lead in opin­ion polls for months, although its ad­van­tage over Sa­ma­ras’ con­ser­va­tive New Democ­racy party has nar­rowed in re­cent weeks. Weak­ness among po­ten­tial coali­tion part­ners of both could mean that which­ever party wins in Jan­uary will strug­gle to form a gov­ern­ment and may not sur­vive long. On the brink of a new cri­sis? Un­der­lin­ing the po­ten­tial vo­latil­ity fac­ing mar­kets, the main Athens stock mar­ket in­dex fell 7% while Greek bond yields jumped above 9%. The main bank­ing stocks in­dex was down more than 11%.

“The out­come of the fi­nal vote ex­tends the po­lit­i­cal un­cer­tainty for at least one month,” said Theodore Krin­tas, head of wealth man­age­ment at At­tica Bank in Athens. “One can­not know if the re­sult of early elec­tions will be a vi­able gov­ern­ment.”

“No sig­nif­i­cant eco­nomic de­ci­sions can be made be­fore there is a new gov­ern­ment and this is al­ready re­flected in the mar­kets to­day,” he said.

Sa­ma­ras, who had been push­ing

vote.

“The

fu­ture

has

al­ready

for an early end to the deeply un­pop­u­lar bailout pro­gram, brought for­ward the pres­i­den­tial vote ear­lier this month, gambling that vic­tory would ease the grow­ing po­lit­i­cal pres­sure on his rul­ing coali­tion.

A ne­go­ti­at­ing team from the Troika of lenders from the Euro­pean Com­mis­sion, IMF and Euro­pean Cen­tral Bank, had been due to re­sume talks in Athens next month to wind up the 240 bln euro bailout and agree an in­terim, post-bailout pro­gramme.

In a bid to re­as­sure in­ter­na­tional part­ners, Tsipras has sounded a more mod­er­ate tone re­cently, promis­ing to keep Greece in the euro and ne­go­ti­ate an end to the bailout agree­ment rather than scrap it uni­lat­er­ally.

But he has stuck to his prom­ise to re­verse many of the tough aus­ter­ity mea­sures im­posed dur­ing the cri­sis, rev­ers­ing cuts to the min­i­mum wage, freez­ing state lay­offs and halt­ing the sale of state as­sets.

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