This weekend sees the Greek people head to the polls once again, and their choice could very well determine the future of not just Greece but of the entire Eurozone.
The two front runners are the young firebrand and radical left leader Alexis Tsipras and the conservative Antonis Samaras. The two men have run a bitter election campaign with insults being traded by both sides. Voters are sick and tired of the harsh austerity measures inflicted upon them by the 130billion euro bailout and saw them punish the mainstream parties during the inconclusive election held in May.
Samaras has run his campaign by maintaining a pro European stance and warning (some would say scare mongering) that if the country gives up its deal agreed in the IMF/EU bailout then it would see a return of the Drachma and even greater disaster would follow suit.
“These elections are about our children’s future – whether we stay in the euro or not,” Samaras told supporters, “That is what is at stake on Sunday.”
SYRIZA leader Tspiras was defiant as he addressed a huge rally in Athens saying; “The memorandum of bankruptcy will belong to the past on Monday,” Attacking New Democracy and Pasok, he claimed that the Greek people are abandoning leaving behind the two parties that were trying to “extort the Greek people and steal votes”.
He said corruption, vested interests and disaster were at the core of these parties and that they had “looted Greece”. He dismissed fears that reneging on the accord with the European Union and International Monetary Fund would drive the country from the single currency, warning “speculators” not to bet on Greece’s exit.
“We will vote on Sunday with our eyes on Spain,” he said, referring to the 100bn euro recapitalisation package offered by the EU to prop up the battered Spanish banking system.”It negotiated and succeeded despite the lenders’ threats and blackmail. It is still in the euro, without an austerity plan.”
Members of the EU have warned whoever wins that no more bailout money will be given to Greece if it abandons its austerity measures and meets its budget and reform pledges. Tsipras is willing to call their bluff
“If one country leaves the euro, the Euro zone collapses,” he told Greek TV on Thursday. “If they don’t give us the next loan instalment, the euro zone will collapse the day after.”
Unemployment across the country has reached a staggering 22.6% and public anger is building by the day. Many analysts are predicting that the election will once again end in a stalemate; such a result could prove disastrous unless a coalition government can be formed. Expressing his anger, one Greek citizen said “They’ve turned Greece from a sunny paradise to hell, people have lost their smiles; they are in despair and committing suicide. This is worse than the war in the 1940s.”
“It’s possible that we will have a collapse no matter who is in government,” said Yanis Varoufakis, a professor of economics at Athens University. “There is no easy solution.”
Elsewhere the Pound fell against the Euro and the Dollar after the Bank of England announced an emergency liquidity package to prop up the British banking system. The banks governor Mervyn King also suggested that more quantitative easing is on its way. Poor trade figures also weakened the Pounds position.
“If we see a ‘positive’ outcome of the election on Sunday in Greece – i.e. win for New Democracy – the pound should rally, especially against the dollar, and against the yen,” said Kathleen Brooks, research director at Forex.com.
The Euro strengthened against a basket of currencies after leaders of the G20 said that they were prepared for a Greek exit from the Euro zone.
The Pound to Euro exchange rate is currently trading at 1.232
The Pound to US Dollar exchange rate is currently trading at 1.553
The Euro to Australian Dollar exchange rate is currently trading at 1.256
The Euro to US Dollar exchange rate is currently trading at 1.261
The Euro to Pound exchange rate is currently trading at 0.811
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