The Strategist

Greek politicians are going to test new stability

01/14/2019 - 11:53

Experts believe that early elections can be good news for investors.

Greece’s political class is going to test investor confidence in the fact that the years of turbulence have gone.

The political future of Prime Minister Alexis Tsipras is under threat due to the fact that the collapse of the coalition forced him to raise the issue of confidence in the government before parliament. This increases the risk of early elections. The current situation reminds that Greece is still in an unstable situation, while the largest countries in the eurozone tend to dominate, notes Bloomberg.

As shown by the polls that are held in connection with the holding of elections, which should take place before September, early voting may speed up the change of power in favor of the center-right opposition. For his part, Tsipras promises that he will complete his term and follow the measures to stabilize the economy after many years of austerity.

Meanwhile, the position of Tsipras, whose coming to power was marked by a very dramatic confrontation, depends on his allies in the coalition of “Independent Greeks”, whose seven parliamentary seats with 300 members provide a balance of power. Syriza of Tsipras has 145 seats.

Defense Minister Panos Kammenos, who heads the “Independent Greeks”, on Sunday sided with the government after a break with Tsipras because of a dispute over the name change of neighboring Macedonia. However, some of the party’s lawmakers may want to keep the ruling coalition.

Tsipras may also risk controlling without a permanent parliamentary majority. He promised that Greece will not return to the polls until the government carries out constitutional reform, approves legislation to protect homeowners and sets a higher minimum wage. At the same time, polls show that if Greece held elections now, the “New Democracy” opposition leader Kyriakos Mitsotakis would receive the majority of votes.

At the same time, analysts believe that these political events would have a positive impact on the investment climate. “Early elections are good news for investors,” says Wolfango Piccoli, co-president of Teneo Intelligence. “The country has been in an election campaign mode for several weeks already, and the earlier the elections are held, the better,” the expert said.