News in Greece: EU’s “Horror Stories” Have Determined the Outcome of Elections

News in Greece: EU’s “Horror Stories” Have Determined the Outcome of Elections

Written by: PaxForex analytics dept - Friday, 27 June 2014 0 comments

For the results of these elections were prepared in advance not only in Greece but throughout the EU. Chances to win had the supporters of the agreement with EU for financial aid and their opponents from Syriza party, which stand for another way for Greece. If the Greeks preferred center-left coalition, the country's withdrawal from the area of the single European currency had all chances to become a nightmare of the Europeans in the harsh reality.

The experts of the international agency Fitch Ratings warned once again – Greece withdrawal from the Euro zone can destroy the whole euro area. So, on Friday night the leaders of the EU and leading European countries were discussed in a teleconference format about current development of the debt crisis in the Europe.

Some sources even in the European Union said that eurozone finance ministers were ready to hold an emergency teleconference as soon as preliminary results become known to the Greek elections. An emergency plan in case of Greece exit from the EU was prepared in the United States too.

German Chancellor Angela Merkel called on the Greeks to vote for leaders who will strictly follow the measures introduced by the savings and the terms of the agreement with the European Union for the financial aid.

In Greece itself was dominated the mood close to panic. On the eve of parliamentary elections, the Greeks began en masse to take money out of banks. Just in one day removed from the banks accounts about 1 billion euros - so citizens are hoping to save money in the event of country’s withdrawal from the monetary union. At the same time people are spending their savings on long-term storage products such as cereals and pasta.

Nevertheless, the fear of European financial moguls, and especially Germany, apparently, did not materialize. According to preliminary results of the voting, the party of New Democracy is to 4% ahead of the center-left coalition Syriza party, therefore, Greece will continue to be a member of the eurozone.

It is assumed that the New Democrats won 131 parliamentary mandates, as under current law the winning party gets a bonus in the form of 50 parliamentary seats. At the same time Syriza, which has already admitted defeat, will get 69 seats.

The leader of New Democracy Antonis Samaras, who has now given a mandate to form the government, has said that Greece will continue to be committed to the obligations as a member of the European Union.

In Brussels do not hide their satisfaction regarding the outcome of these elections. EU expressed the hope that the Greeks as early as possible will form the government. At the same time Eurogroup has already stated that the representatives of IMF, ECB and EU will return to Athens to prepare an analysis of the country's economic success for the second program to save it from default as soon as the country's new government will be formed.

Meanwhile, the victory of New Democracy's parliamentary elections has caused a rise in global stock index markets: Dow Jones rose to 85 points, Nasdaq 100 added 20.25 points, while the S & P 500 went up to 7.2.

Now Greece will go through tough negotiations on forming a new government. The leader of the Syriza party Alexis Tsipras said yesterday that he would work in opposition, cutting off the other parties an opportunity to bring him to the government and thereby share responsibility for the rigid and highly unpopular austerity measures.

In any case, the options for the development of the situation are now only two. Either the Greeks will form a coalition of supporters to cooperating with international creditors and will continue belt-tightening policy or the country will face a new round of political crisis and the new elections.

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