Greek opinion polls are showing that the pro-Euro party New Democracy is on course to take first place in the troubled nation’s upcoming elections.
The poll results have helped the Euro strengthen against the Dollar for the first time in five days but more bad news out of Spain in regards to the Privatization of the Bankia group has tempered any further increases, weakening the currency once more.
New Democracy’s increase in popularity comes after a weekend in which fear was the main weapon for both sides of the Greek political spectrum. The pro austerity parties told voters that disaster would befall the country if they left the single currency.
Party leader Antonis Samaras told voters at the weekend; “No society, no economy and no democracy can tolerate such a sudden collapse in so little time.” Samaras warned of the consequences of Greece leaving the Eurozone, that Greeks would face terrible repercussions.
Continuing pressure from the International monetary fund and the European central bank has added to the sense of needing the Euro.
“A large part of the electorate seems to be replacing its anger with concern for the dangers of leaving the country ungoverned and of an exit from the euro,” said Athens-based economist To Vima
“It’s not really in Greece’s interest to leave the euro,” Charles Lieberman chief investment officer at Advisors Capital Management LLC, “If Greece departs, their currency collapses, inflation goes through the roof, they have to walk away from all their obligations — and they’re outcasts within Europe. And for what? What does it get them?”
New Democracy’s lead may be short lived however after its allies in the IMF and Deutsche bank caused outrage. The head of the IMF Christine Lagarde has came under attack by thousands of angry Greeks after telling a newspaper that children in Africa needed more help than the Greeks who were ‘trying to escape tax all the time’ and Deutsche Bank’s Juergen Fitschen said; “Greece is the only country, I feel, where we can say it’s a failed state, it is a corrupt state, corrupt as far as its political leadership is concerned and obviously other people had to be willing to support this.”
After the comments reached the ears of angry Greeks the IMF chiefs Facebook page was bombarded with insults and threats. Lagarde tried to defuse the situation by releasing a statement: “As I have said many times before, I am very sympathetic to the Greek people and the challenges they are facing. That’s why the IMF is supporting Greece in its endeavour to overcome the current crisis and return to the path of economic growth, jobs and stability. An important part of this effort is that everyone should carry their fair share of the burden, especially the most privileged and especially in terms of paying their taxes. That is the point I was emphasizing when I spoke to the Guardian newspaper as part of a broader interview.”
The comments are sure to give the anti-austerity parties a boost making the election result even more difficult to predict. Fear and insults are not the way for the pro Euro parties to win over enough of a majority to take power.
Concern over Spain has driven the yield on the country’s 10-year bonds closer to the level that induced sovereign bailouts for Greece, Ireland and Portugal. The yield climbed 14.8 basis points to 6.311 on May 25.
The Pound to Euro exchange rate is currently trading at 1.246
The Pound to US Dollar exchange rate is currently trading at 1.568
The Euro to US Dollar exchange rate is currently trading at 1.257
The Euro to Pound exchange rate is currently trading at 0.801
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