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  • Alexis Tsipras speaks at the headquarters of his Syriza party.

    Alexis Tsipras speaks at the headquarters of his Syriza party. | Photo: Reuters

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This is the most severe market drop in over a quarter of a century, after the Greek government called for early elections on Monday.

Prime Minister Antonis Samaras provoked a Black Tuesday in the Greek stock market, after he decided on Monday to hold snap elections two months ahead of schedule – elections that his conservative party, New Democracy, are likely to lose to leftist Syriza.

Samaras confirmed former European Commissioner Stavros Dimas as his coalition's candidate on Tuesday. However the conservative coalition will need to win at least 180 seats (three fifth of the Congress) on December 17 in the first round.

They only control 155 ones at the moment, while the Democratic Left (DIMAR) and Independent Greeks, which do not belong neither to the ruling coalition nor to Syriza, repeated on Tuesday they would not back the government's candidate.

“It is a high stakes gamble,” Holger Schmieding, chief economist at Berenberg Bank in London, said in an e-mailed note.

“Snap parliamentary elections in January could then bring left-wing SYRIZA into power in Athens.”

If Samaras' gamble fails, the Greek constitution demands new parliamentary elections in January, which are likely to be won by the recently-created coalition Syriza – the number one political force of the country since 2012 legislative elections. According to the latest polls Syriza leads by 4 to 9 percentage points over New Democracy.

A few hours before Samara's decision to call the election, the Finance Ministers of the European Union had agreed to give Greece a two-months deadline extension to the European part of an international bailout that ends on December 31.

Nevertheless the Athens general index lost almost 13 percent in one day – the steepest drop since 1987. Foreign investors expect that a Syriza victory will put an end to the five years of austerity policies implemented by the previous traditional parties, and partly imposed by European creditors and the IMF.

On Tuesday, Syriza leader Akexis Tsipras welcomed the decision of Samaras, in a meeting with other Syriza leaders saying, "The acceleration of the process for the election of president by a Parliament that is too weak to achieve the broad consensus required by law for the election of president equals the acceleration of procedures that will lead to a popular vote."

Later, during a public event in Athens, Tsipras called voters to give “a big, unquestionable, fighting majority that will allow us to implement our program and confront the major obstacles.”

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