Greek Statue - Flickr Creative Commons

Though flying under the radar here, there are some important developments in the Greek Elections that could change the economic situation in Europe and here as well. The Guardian has a live blog going on the situation here.

And Athens News has one here. This in my estimation is more important that the French election results, but maybe only just.

Here is the latest break down from the Guardian.

2.35pm: Shares on the Athens stock markets are being routed, after Alexis Tsipras (who holds the mandate to form the next Greek government) insisted that Greece should not abide by the terms of its bailout (see 1.27pm onwards).

The main stock index in Athens has fallen by 5%, with the banking index down by over 10%.

Analysts at IHS Global Insight warned this afternoon that the prospects of a strong, stable Greek government look “more and more distant”, adding:

Without political and social support for austerity and reforms, the already challenging adjustment programme agreed with the “troika” looks destined for failure.

Although several polls show that a majority of Greeks wish to stay in the Eurozone, the surge in votes for parties decidedly against the reform programme suggests that a sizeable portion of the Greek electorate is not prepared to do what needs to be done in order to remain in the common currency area.

But can you blame them, in the face of a five-year recession, unemployment rising, and an ongoing slump in its manufacturing and industrial sectors?

2.30pm: Here’s a breakdown of Alexis Tsipras’s conditions for forming a new government with either of the two ‘mainstream’ Greek parties (via Ekathimerini

1) The immediate cancellation of all impending measures that will impoverish Greeks further, such as cuts to pensions and salaries.

2) The immediate cancellation of all impending measures that undermine fundamental workers’ rights, such as the abolition of collective labor agreements.

3) The immediate abolition of a law granting MPs immunity from prosecution, reform of the electoral law and a general overhaul of the political system. According to Keep Talking Greece, that would include abolishing the 50-seat bonus for the party which wins the most seats.

4) An investigation into Greek banks, and the immediate publication of the audit performed on the Greek banking sector by BlackRock.

5) The setting up of an international auditing committee to investigate the causes of Greece’s public deficit, with a moratorium on all debt servicing until the findings of the audit are published.

That adds up to a resounding rejection of Greece’s current financial programme.

And here from Athens News.

4.55pm A lot has been said today about the statements made by Syriza member Dimitris Stratoulis, concerning the Greek banks and possible state control, in an interview given to Vima FM radio station.  The highlights are as follows:
- Technically and financially, if you’re saying we are leaving the memorandum, how will you handle the banking issue? If we leave the memorandum, they’ll just be empty tresure chests.
- They won’t be empty treasure chests. Greek banks already have 165 billion euros worth of deposits by the Greek people.
- That’s our money, not bank money though.
- We shall put in motion an immediate public audit of the banks, guarantee citizen deposits and then use that money for growth and a productive re-structuring of our country.
- Does that mean deposits will be freezed?
- We said we will provide guarantees, no deposits will be frozen.
- And how will that money be used for growth, when it belongs to Greek citizens?
- How would you want it used? Up until now, it has been used, to fund the profits of bank shareholders and bankers. Should it not be used to support market liquidity, to offer loans to small and medium sized business ventures, to offer loans to the public for houses, to offer consumer loans? It is all a matter of political direction.
Part of his positions were echoed by Alexis Tsipras, when he spoke from Parliament earlier, although neither he nor Stratoulis have made the details of their banking plan completely clear.
Pictured here during his earlier meeting with the Syriza chief, Democratic Left party leader Fotis Kouvelis has pledged his support to Alexis Tsipras, in his quest to form a coalition government. ”I told him that if he wants he can go ahead with a government of leftist parties, with the support of the Democratic Left,” he said.
4.15pm At a press conference in parliament, Alexis Tsipras has said that the country’s commitment to an EU/IMF rescue deal has become null after voters rejected pro-bailout parties in Sunday’s election. “The popular verdict clearly renders the bailout deal null.”
He said said that Antonis Samaras and Evangelos Venizelos must take back their written support for the memorandum – by writing a letter to Brussels informing them of this. He presented his policy platform which he said was based on 5 pillars:
1. Immediate begation of the memorandum
2. Negation of all coming measures that will affect all aspects of employment law
3. Immediate changes to election legislation and negation of the ministerial culpability law
4. State control of banks
5. The creation of an international auditing body, with the purpose of finding a serious and logical solution to Greece’s debt repayment.
He once again extended his hand to all powers of the left, praising KKE’s position on protecting the unemployed and said that he still aimed at forming a government with all parties supporting leftist and eco-friendly ideology.
He noted that the formation of a coalition government with New Democracy and Pasok, was not possible for they were not looking at saving the nation, but saving the memorandum.
Basically giving Merkel and Germany the bums rush on Austerity. If he succeeds in forming a government and pushing these reforms through – which is problematical at this point – it would signal an end to German economic hegemony and Spain and Ireland and possible Italy may follow.
Keeps your eyes pealed.