Tuesday, December 30, 2014

Greece’s Bad Political Choices

Wall Street Journal
December 29, 2014

Just when you thought it was safe to invest in Greece again, Greek politicians intervene. Prime Minister Antonis Samaras ’s failure Monday to secure 180 out of 300 parliamentary votes for his preferred presidential candidate has triggered a national election, to be held Jan. 25. The stock market tumbled, and yields on Greek bonds rose, in a familiar vote of no confidence.

The greatest fear is that the far-left Syriza party will win enough seats to form a government. Syriza and its leader, Alexis Tsipras, oppose the bailout Greece has received from the International Monetary Fund, European Commission and European Central Bank and have threatened to force a renegotiation that would require foreign creditors to take bigger haircuts on Greek debt. The party also promises free electricity, more spending and a rollback of even the small economic reforms that Greece has made.

Yet the closer the election comes, the warier voters become of Syriza. Its lead over Mr. Samaras’s New Democracy party is now between three and four percentage points, down from 6.5 points in October, and it’s not certain that Syriza could form a stable government even if it wins a majority. In this sense, Mr. Samaras’s tactic of engineering an early election to focus voters on his opponents’ shortcomings may be working.


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