Mish's Global Economic Trend Analysis

Throwing Bones to Greece; A Victory for Europe (or a Victory for French and German Banks)?
New Democracy Leader "Will Honour Commitments to the EU; Euro Trades Higher; Coalition Review
New Democracy Wins But May Be Unable to Form Coalition
Preliminary Greek Exit Polls Show Dead Heat Syriza 27-30, ND 27.5-30.5; The Youth Vote Last and Vote Left; Are the Nannycrats Afraid of Democracy?

Throwing Bones to Greece; A Victory for Europe (or a Victory for French and German Banks)?

Posted: 17 Jun 2012 09:08 PM PDT

Throwing Bones to Greece

In the wake of New Democracy eking out a victory over Syriza in the Greek elections, the nannycrats are willing to toss a few bones to Greece.

For example this headline on Bloomberg says Euro Chiefs Signal Greek Austerity Softening as Summit Looms.

Only vague references in the article pertain to concessions.

"German Foreign Minister Guido Westerwelle said negotiators could consider giving Greece more time to fix its finances, telling ZDF television that the political gridlock over the past six weeks "has done damage."

The hope of nannycrats is that vague promises to "soften stance" will lead to a coalition between New Democracy and Pasok. Perhaps it will. Pressure on Pasok will be immense.

A victory for Europe (or French and German Banks)?

The Irish Times reports New Democracy party hails 'victory for Europe'

The leader of Greece's pro-memorandum conservative party has claimed victory in the country's second election in as many months, describing it as a "victory for Europe".

"The people of Greece have shown their will to stay anchored in the euro zone and honour our commitments," said Antonis Samaras, in a victory speech delivered in Greek and English.

"They have voted for a European course and our stay in the euro. They voted for jobs, justice and safety. No more adventures."

How is this a victory for Europe? How is it even a victory for Greece? The only victory is for the stock market and bondholders, at taxpayer expense of course.

"No more adventures" says Samaras. "Wanna Bet?" replies Mish.

Short-term Greece stays in the eurozone. The irony is, perhaps this will force Germany to come to its senses and say "you can have it".

A German exit will not happen as long as Merkel is running the show, but the moment the decision is put to voters of Germany in an official referendum, anything can happen.

I believe the German people are likely to (and should) say to hell with it all. After all, the euro project has been a spectacular failure.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

New Democracy Leader "Will Honour Commitments to the EU; Euro Trades Higher; Coalition Review

Posted: 17 Jun 2012 01:05 PM PDT

Sticking with quotes from the Guardian Live Election Blog, New Democracy leader Antonis Samaras "Will Honour Commitments to the EU".

Samaras summarised his speech in English:

His party would honour commitments to the EU.
It was a victory for all Europe.
A call for all political parties that share objectives to form government.
Sacrifices of Greek people will be reflected.
Determined to do what it takes and do it fast.

That message is not going to play well with Greek voters given his pledge to change conditions.

Coalition Depends On Pasok

At this point it is up to Pasok. Will that party form a coalition government or not?

Results look something like this:

New Democracy will receive 29.53% of the vote, equivalent to 128 seats.
Syriza will receive 27.12% – 72 seats.
Pasok will receive 12.2% – 23 seats.
Independent Greeks will receive 7.56% – 20 seats.
Golden Dawn will receive 6.95% – 18 seats.
Democratic Left will receive 6.23% – 17 seats.
Greek Communist Party will receive 4.47% – 12 seats.

Unless Pasok is willing to enter into a coalition government, there is no likely coalition with New Democracy.

Then it would be up to Syriza to form a coalition.

Otherwise, look forward to more elections.

Euro Trades Higher

Reuters reports Euro jumps broadly after Greek vote results

The euro hit a three-week high against the U.S. dollar after official Greek election projections showed parties committed to Greece's multi-billion-euro bailout were on course to secure a slim parliamentary majority.

The euro rose to around $1.2730 according to Reuters data in early Australasian Monday trade, from around $1.2655 late in New York on Friday. It hit its strongest since May 22 according to Reuters charts.

Addendum:

I had originally posted that the 50 bonus seats would go to Syriza if New Democracy failed to form a coalition. Some pointed out that is not what happens. If so, then if New Democracy fails to form a coalition, then no coalition is likely.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

New Democracy Wins But May Be Unable to Form Coalition

Posted: 17 Jun 2012 12:27 PM PDT

In the last 15 minutes I have changed this blog headline a few times from various forms of likely winner for New Democracy to "winner".

The key news now is that it still depends on Pasok , which has stated unwillingness to enter into a coalition with New Democracy and refused to do so in the last election.

From The Guardian Greek Live Election Coverage.

7.53pm: Horsetrading between the parties has begun:

Pasok has been publicly stating that it will not join any coalition without Syriza.

Pro-EU New Democracy on the other hand has been talking on Sky News about a "grand coalition".

Panos Kammenos, leader of the Independent Greeks, a right-wing party that could have been in line to ally with New Democracy has told the press that the party is keen to support a government that will condemn the bailout agreements – that would in effect rule out a deal with New Democracy.

7.36pm: The official projection figures for the election have now been announced by Greece's interior ministry. Greek pollster, Marika Lambrou, said this:

There will be seven parties in the next parliament, as was the case on 6 May. There will be no upset in the order of the parties but there has been a "considerable increase" in the number of votes for the two leading parties.

New Democracy will receive 29.53% of the vote, equivalent to 128 seats.
Syriza will receive 27.12% – 72 seats.
Pasok will receive 12.2% – 23 seats.
Independent Greeks will receive 7.56% – 20 seats.
Golden Dawn will receive 6.95% – 18 seats.
Democratic Left will receive 6.23% – 17 seats.
Greek Communist Party will receive 4.47% – 12 seats.

Unless Pasok is willing to enter into a coalition government, there is no coalition with New Democracy possible.

Addendum:

I had originally posted that the 50 bonus seats would go to Syriza if New Democracy failed to form a coalition. Some pointed out that is not what happens. If so, then if New Democracy fails to form a coalition, then no coalition is likely.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Preliminary Greek Exit Polls Show Dead Heat Syriza 27-30, ND 27.5-30.5; The Youth Vote Last and Vote Left; Are the Nannycrats Afraid of Democracy?

Posted: 17 Jun 2012 09:59 AM PDT

The question of the day, to which we all know the answer (but I want to ask the question anyway), Are the Nannycrats Afraid of Democracy?

Here is a comment someone posted on the Guardian Greek Election Blog

Condemning the outside interference in the election, Greek blogger Nick Malkoutzis, who is also deputy editor of deputy editor of Kathimerini English Edition, writes that "Europe that has become scared of democracy".

This is the quid pro quo of the loan deals: Greece receives money in return for certain fiscal measures and structural reforms. Nowhere does the agreement dictate how people should vote in a free election.

This hasn't prevented a number of European officials from expressing an opinion about their preferred outcome of Sunday's vote. The latest to do so was Luxembourg Prime Minister Jean-Claude Juncker. "If the radical left wins – which cannot be ruled out – the consequences for the currency union are unforeseeable," said Juncker, who as head of the Eurogroup also holds an institutional role within the European Union, a role that – theoretically – implies neutrality on such sensitive issues as national elections.

Juncker's comment is in keeping with repeated interventions by Europeans over the last month. Their comments implied a deep disapproval of potential choices by free citizens. This began in February when German Finance Minister Wolfgang Schaeuble made the incredible suggestion that Greece should hold off elections and allow the interim government led by Lucas Papademos to stay in power for longer. This revealed a Europe that has become scared of democracy, unable to deal with the uncomfortable realities that it can produce.

Indeed, the nannycrats do not want voters to decide anything. Their first preference is to have the nannycrats (themselves) to decide everything.

Their second preference is to have politicians decide everything. Should actual votes be necessary, the nannycrats promise Armageddon if they do not get what they want, holding repeat elections until they do get what they want.

When politicians do not abide, they are forced out and replaced by technocrats, such as happened in Greece and Italy.

The Youth Vote Last and Vote Left

Here are some comments I selected from the Guardian Election Blog

#Greece2012 Pub Issue (opinion poll): Syriza 31-25, ND 30-25, Pasok 15-11, IndGreeks 9-6, DemLeft 9-6, KKE 7-4, GolDawn 7-4, Recreation 3-1
#Greece Pollster Stratos Fanaras saying a part of voters-mainly younger people who came to vote in last 2hrs-refused to answer to exit polls
Two important data: 1.Youngsters vote last. 2. Youngsters vote for left #Greece2012 #ekloges12
SYRIZA 28, ND 27.5, PASOK 13, Dem Left 7.5, Ind Greeks 7.5, GD 5.5, KKE 5.5 Skai TV opinion poll, not exit poll #Greece2012
News in from Helena Smith, our correspondent in Athens, on the latest unofficial exit polls being conducted on behalf of political parties ahead of the close of the ballot at 7pm local time (5pm BST). "I have just spoken to a senior cadre in the socialist Pasok party where unofficial polling results are being monitored on a two-hourly basis. The next few hours are crucial as the rush to vote has only just begun among young people," he told me. From now to the close of the election polling stations are likely to be packed."

This looks close, and at least a 50-50 chance for Syriza. I suggest as much as 60-40 if the comment about youth voting left and last is correct.

Greece is destroyed in either case. The question is how fast it will recover. Total default on debt is a great first step, even if the rest of Syriza's policies cannot work.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

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Sunday, June 17, 2012

Mish's Global Economic Trend Analysis

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