Monday, December 8, 2014
Tsipras May Become Next Greek Leader, Mixing Mao With Bond Yield
December 8, 2014
As Alexis Tsipras moves closer to taking control of Europe’s most indebted country, he’s trying to convince bond investors they have nothing to fear.
The 40-year-old leader of Coalition of the Radical Left, better known as Syriza, alarmed an entire continent at the height of the euro-area crisis in 2012, when his party narrowly lost the second Greek election that year. He campaigned then on a pledge to tear up the country’s bailout agreement, risking a euro exit. Now he’s pledging fiscal prudence.
“We don’t want to return to deficits,” Tsipras told the Greek parliament in Athens during a debate last night. “We don’t want new borrowed money.”
Tsipras is trying to convince voters exhausted by five years of austerity that he can walk a tightrope between rolling back spending cuts and balancing the budget. While economists question the math underlying his pledge, some investors say the prospect of a Tspiras government isn’t reason to panic just yet.
“If Syriza wins the elections then there might be maybe a short-term repricing in Greek assets, but I don’t think it’s going to be a long-lived weakness,” said Nicola Marinelli, who helps manage 110 million euros ($135 million) of assets at Pentalpha Capital Ltd in London. “It might even be an opportunity to buy.”