GREECE CRITICAL FORTNIGHT

Greece is on the eve of a critical fortnight, during which its parliament has to elect a President   If Parliament fails to elect a President between now and 29 December, there will be a general election called. With Syriza,( the Coalition of the Radical left) , ahead four per cent in the polls, it is likely that it will form the biggest party. Syriza will end austerity and will demand that the European central bank (ECB) cancels half of Greek debt and buys all future debt at zero interest for 60 years. There is a big chance that a Left-led Greece would clash with Brussels, that money would flow out of the country and that in the process Greece would get forced out of the Eurozone. What’s at stake is clear. If Syriza wins a subsequent election, it will end the austerity imposed by the EU and International monetary fund and call Germany’s bluff. It will be a fragile, inexperienced Marxist government in an EU and Nato member state. But, if it succeeds, the EU will be in a whole new ball game

Given these political and economic realities, there are three schools of thought as to what might happen if Mr. Tsipras (Syrisa Leader) becomes prime minister early next year.

1. Some argue that he has no chance of winning a confrontation with the troika and so will end up either deliberately or accidentally leading Greece out of the euro.
2. Seasoned political observers disagree, not least because support for euro membership remains high in Greece and few doubt that the consequences of a so-called Grexit would be devastating for the economy. According to this school of thought, Mr. Tsipras is more likely to follow the long and dishonorable Greek tradition of dumping his most nonsensical policies and radical demands the moment he is elected.
3. The third school of thought is that Mr. Tsipras will indeed make a U-turn, but that it won’t come quickly. This is the view held by some troika officials and it appears to be shared by investors: Investors appear to be betting that the economic consequences of Mr. Tsipras in terms of a delayed recovery and a slower fall in unemployment will be borne by Greece and Greece alone. Whether this is a price worth paying to rid Greece of the political elites who many blame for the crisis or whether Syriza will sweep away rather than perpetuate the cronyism and corruption that many associate with those elites is something that only Greeks can judge.