Eurozone on the brink of new crisis as snap Greek elections loom
Eurozone on the brink of new crisis as snap Greek elections loom
The future of the eurozone is under threat as Greece faces the prospect of snap elections and victory for the country’s far-Left, anti-austerity opposition
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8:42AM GMT 29 Dec 2014
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Greece and the eurozone is on the brink of a new crisis as the country’s parliament prepares to vote on a new president.
The Greek government has so far failed in two rounds of voting to find the parliamentary majority it needs to have its presidential candidate approved later.
Failure to win the vote on Monday morning will trigger a snap general election, under the Greek constitution, at a time when a far-Left party opposed to eurozone austerity leads in the opinion polls.
The election of the popular Syriza party, which is opposed to austerity measures demanded by EU and IMF creditors in return for a Greek debt bailout, threatens the future of the euro.
Gikas Hardouvelis, the Greek finance minister, warned on Sunday that the election of an anti-austerity party could lead to punitive European Central Bank economic sanctions against Greece.
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“The ECB holds the key,” he told Greece's To Vima newspaper. “This key can easily and abruptly turn off bank funding and strangle the Greek economy in a split second.”
If the ECB or EU acts to remove support from Greece, the country could be pushed out of Europe’s single currency triggering the return of a crisis that threatens the future of the eurozone.
Alexis Tsipras, the leader of the far-Left Syria party, wants to keep Greece in the euro but has vowed to halt austerity measures if he wins elections that are expected to take place in late January or early February.
“Our historical responsibility is to pave the way for an alternative policy in Europe, turning a Eurozone country from a neoliberal experiment to a model of social protection and growth,” he wrote in his party’s Avgi newspaper on Sunday.
Germany has warned Greece that any attempts to reverse eurozone austerity measures after elections will not be tolerated, putting the country on a collision course with the EU and the ECB,
"The upcoming elections will not change Greek debt. Every new government needs to fulfil the contractual agreements of its predecessors," said Wolfgang Schaeuble, the German finance minister, at the weekend. “If Greece chooses another direction, it will result in a difficult situation.”
If elections take place, the national vote is expected to be held on either Sunday 25 January or Sunday 1 February.
The results will then be debated at an emergency summit of EU leaders on Thursday 12 February, followed by a meeting of euro area finance ministers four days later where key decisions will be taken.
Antonis Samaras, the conservative Greek prime minister, warned MPs and Greek voters that elections and the prospect of a victory for Syriza would “throw Greece into turmoil.”
"The Greek people don't want early elections. The Greek people understand where this adventure could lead,” he said.
“If we don’t elect a president the responsibility will hang heavily over those who don’t vote. They will be remembered by everyone, especially history.”
In a second round of parliamentary voting last week, Stavros Dimas, the government’s presidential candidate obtained 168 votes, 32 short of the 200 required.
Greece's two-party governing coalition has 155 seats and needs support from opposition and independent lawmakers to ensure a win for Mr Dimas, a former banker and EU commissioner.
In the final round on Monday morning, Mr Samaras needs the support of 180 MPs to avert elections and to appointed Mr Dimas as Greek president.
Mr Dimas announced last week that he would not take office with the support of MPs from Golden Dawn amid reports that the neo-Nazi party was planning to support the government to keep the far-Left out of power.
“I will not accept to be elected President of the Hellenic Republic with votes by Golden Dawn,” he said on Christmas Eve.
Seven Golden Dawn MPs, including the neo-Nazi party’s leader, have been granted temporary leave from prison, where they are facing charges of organising a criminal organisation, to attend the votes.
Mr Tsipras’s Syriza party is currently leading the opinion polls, although the gap has narrowed as the prospect of a general election and eurozone sanctions against Greece looms.
In a poll published in the To Vima newspaper, Syriza leads with 27.4 per cent support, ahead of 25.7 per cent for for Mr Samaras’s New Democracy party.
In another poll published by the Proto Thema newspaper, Syriza had 28.3 per cent support ahead of New Democracy on 25 per cent.
“The die is cast”, “Judgement Day” and “Hour of Responsibility” were the Monday headlines of pro-government newspapers on Monday while the opposition EfSyn newspaper countered with “The lies are over”, referring to the onset of elections.
The Athens bourse fell five points as trading began on Monday morning, stock markets also plunged in debt-laden Italy and Spain where anti-austerity parties are also challenging the EU's economic policies.
Spyros Lykoudis, an independent MP, who voted with the government in the second round on Dec 23, predicted that that Mr Samaras would fail to win the vote on Monday.
“Unless there is a surprise, unless a party changes its stance, I don't expect parliament to elect a president tomorrow given the current circumstances,” he said.
"Nothing can be ruled out, but parties are in any case preparing for elections.”the Telegraph
