Sunday, January 25, 2015

Radical Leftists Win Election In Greece – Future Of Eurozone In Serious Jeopardy BY THE DAILY COIN · JANUARY 25, 2015

Radical Leftists Win Election In Greece – Future Of Eurozone In Serious Jeopardy

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by Michael Snyder, The Economic Collapse Blog

Radical leftists have been catapulted to power in Greece, and that means that the European financial crisis has just entered a dangerous new phase. Syriza, which is actually an acronym for “Coalition of the Radical Left” in Greek, has 36 percent of the total vote with approximately 80 percent of the polling stations reporting. The current governing party, New Democracy, only has 28 percent of the vote. Syriza leader Alexis Tsipras is promising to roll back a whole host of austerity measures that were imposed on Greece by the EU, and his primary campaign slogan was “hope is on the way”. Hmmm – that sounds a bit familiar. Clearly, the Greek population is fed up with the EU after years of austerity and depression-like conditions. At this point, the unemployment rate in Greece is sitting at 25.8 percent, and the Greek economy is approximately 25 percent smaller than it was just six years ago. The people of Greece are desperate for things to get better, and so they have turned to the radical leftists. Unfortunately, things may be about to get a whole lot worse.

Once they formally have control of the government, Syriza plans to call for a European debt conference during which they plan to demand that the repayment terms of their debts be renegotiated. But the rest of Europe appears to be highly resistant to any renegotiation – especially Germany.

Syriza says that it does not plan to unilaterally pull Greece out of the eurozone, and that it also intends for Greece to continue to use the euro.

But what happens if Germany will not budge?

Syriza’s entire campaign was based on promises to end austerity. If international creditors refuse to negotiate and continue to insist that Greece abide by the austerity measures that were previously put in place, what will Syriza do?

Will Syriza back down and lose all future credibility with Greek voters?

Since 2010, the Greek people have endured a seemingly endless parade of wage reductions, pension cuts, tax increases and government budget cutbacks.

The Greek people just want things to go back to the way that they used to be, and they are counting on Syriza to deliver.

Unfortunately for Syriza, delivering on those promises is not going to be easy. They may be faced with a choice of either submitting to the demands of their international creditors or choosing to leave the eurozone altogether.

And if Greece does leave the eurozone, the consequences for all of Europe could be catastrophic…

Syriza risks overplaying its hand, said International Capital Strategies’ Rediker. “Given that the ECB controls the liquidity of the Greek banking system, and also serves as its regulator through the SSM (Single Supervisory Mechanism), going toe-to-toe with the ECB is one battle that could end very badly for the Greek government.”

If the ECB were to stop funding the liquidity of the Greek banks, the banks could collapse—an event that could lead to Greece abandoning the euro and printing its own money once more.

Milios didn’t believe it would come to that, saying, “No one wants a collapse of banks in the euro zone. This is going to be Lehman squared or to the tenth. No one wants to jeopardize the future of the euro zone.”

Hopefully cooler heads will prevail, because one bad move could set off a meltdown of the entire European financial system.

Even before the Greek election, the euro was already falling like a rock and economic conditions all over Europe were already getting worse.

So why would the Greeks risk pushing Europe to the brink of utter disaster?

Well, it is because economic conditions in Greece have been absolutely hellish for years and they are sick and tired of it.

For example, the BBC is reporting that many married women have become so desperate to find work in Greece that they are literally begging to work in brothels…

Some who have children and are struggling to support them have turned to sex work, to put food on the table.

Further north, in Larissa, Soula Alevridou, who owns a legal brothel, says the number of married women coming to her looking for work has doubled in the last five years.

“They plead and plead but as a legal brothel we cannot employ married women,” she says. “It’s illegal. So eventually they end up as prostitutes on the streets.”

When people get this desperate, they do desperate things – like voting radical leftists into power.

But Greece might just be the beginning. Surveys show that the popularity of the EU is plummeting all over Europe. Just check out the following excerpt from a recent Telegraph article…

Europe is being swept by a wave of popular disenchantment and revolt against mainstream political parties and the European Union.

In 2007, a majority of Europeans – 52 per cent – trusted the EU. That level of trust has now fallen to a third.

Once, Britain’s Euroscepticism was the exception, and was seen as the biggest threat to the future of the EU.

Now, other countries pose a far bigger danger thanks to the political discontents unleashed by the euro.

At this point, the future of the eurozone is in serious jeopardy.

I have a feeling that major changes in Europe are on the way which are going to shock the planet.

Meanwhile, the rest of the globe continues to slide toward another major financial crisis as well.

So many of the things that preceded the last financial crisis are happening once again. This includes a massive crash in the price of oil. Most people have absolutely no idea how critical the price of oil is to global financial markets. I like how Gerald Celente put it during an interview the other day…

I began getting recognition as a trend forecaster in 1987. The Wall Street Journal covered my forecast. I said, ‘1987 would be the year it all collapses.’ I said, ‘There will be a stock market crash.’ One of the fundamentals I was looking at were the crashing oil prices in 1986.

Well, we see crashing oil prices today and the banks are much more concentrated and levered up in the oil patch than they were in 1987. From Goldman Sachs to Morgan Stanley banks have been involved in major debt financing, derivatives and energy transactions. But much of this debt has not been sold to investors and now we are going to start seeing some big defaults.

By itself, the Greek election would be a significant crisis.

But combined with all of the other economic and geopolitical problems that are erupting all over the planet, it looks like the conditions for a “perfect storm” are rapidly coming together.

Unfortunately, the overall global economy is in far worse shape today than it was just prior to the last major financial crisis.

This time around, the consequences might just be far more dramatic than most people would ever dare to imagine. www.google.com/+EricAu118

Greece's Syriza party looks set for a comfortable victory

Anti-austerity Syriza looks set to take rein in Greece.

Editors' Picks

Riding a wave of frustration at a deep economic recession and austerity measures demanded by other European powers, early results from Greece's election showed the left-wing Syriza with a comfortable lead.

By Renee Maltezou and Deepa Babbington, Reuters JANUARY 25, 2015

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ATHENS — Greece's Syriza party looks set for a comfortable victory over the ruling conservatives, exit polls and preliminary results from the government showed, with the anti-austerity political upstart receiving strong backing from voters angry at the spending restrictions imposed on the country by the European Union and the IMF so that Greece can pay back its international creditors.

The result is likely to trigger a standoff with austerity-minded Germany and could threaten the distribution of the next tranche of more than 7 billion euros in outstanding international aid Greece needs in the next few months.

Syriza could gain 35.5-39.5 percent of the vote, well ahead of the conservative New Democracy party of outgoing Prime Minister Antonis Samaras on 23-27 percent, according a joint exit poll for Greek television stations issued immediately after voting ended. Other individual exit polls showed similarly strong leads for Syriza, which also indicated a change that Syriza could claim an outright majority in parliament.

The first official results were released at 9:30 local time. With 27 percent of the votes counted, Syriza had won 35.44 percent, with New Democracy trailing in second with 28.8 percent. The neo-Nazi Golden Dawn was in third with 6.7 percent of the vote.

Unless the polls are badly wrong and later-counted precincts sharply reverse Syriza's gains, the vote should see 40-year-old Syriza leader Alexis Tsipras installed as prime minister and become the first head of a euro zone government to openly oppose the bailout conditions imposed by European Union andInternational Monetary Fund during the region's debt crisis.

With flag-waving supporters hitting the streets of Athens, some shedding tears of joy, Germany's Bundesbank warned Greece it needed to pass new laws to tackle its economic problems.

A majority?

The poll showed Syriza could have between 146-158 seats in the 300-seat parliament, with the final result heavily dependent on whether former Prime Minister George Papandreou's centre-left Movement of Democratic Socialists enters parliament.

"It is a historic victory, we still have to see if it will be a big historic victory," Syriza spokesman Panos Skourletis told Greece's Mega TV. "It sends a message against austerity and in favor of dignity and democracy," he said.

Investors have been worried a Syriza victory will trigger a new financial crisis in Greece, but the repercussions for the euro zone are expected to be far smaller than feared the last time Greeks went to the polls in 2012.

A final result could come in the early hours of Monday but after one of the shortest campaigns in recent Greek history, voters appear to have rejected the austerity medicine prescribed during a crisis which has threatened almost 4 million Greeks or a quarter of the population with poverty.

As the biggest party in the 300-seat parliament, Syriza would gain an automatic premium of 50 seats but under Greece's complicated election rules, the number of votes it needs for an absolute majority depends on how the overall vote is split up.

If he ends up short of an absolute majority, Tsipras will have to try to form a coalition with smaller parties or reach an agreement that would allow Syriza to form a minority government with ad-hoc support from others in parliament.

"The big gap between Syriza and New Democracy was a surprise because it exceeded any forecasts of a single-digit percentage gap," said Dimitris Mardas, Professor at University of Macedonia, adding they would probably still need a partner to govern.

Eyes on Berlin

Tsipras has promised to keep Greece in the euro and has toned down some of the fiery rhetoric he exhibited during his rise to prominence. But his arrival in power would herald a challenge to the approach adopted to the crisis by the wealthier euro zone governments.

Coming after the European Central Bank's move to pump billions into the bloc's flagging economy, the results will stir consternation in Berlin, which insists the bailout deal must be respected.

Asked about the reminder of the need for a change in economic management from Bundesbank President Jens Weidmann, Skourletis told Greek television: "It confirms the negotiations have already started."

Tsipras has promised to renegotiate a deal with the European Commission, European Central Bank and International Monetary Fund to write off much of Greece's 320 billion-euro debt, which at more than 175 percent of gross domestic product, is the world's second highest after Japan.

At the same time, he wants to roll back many of the austerity measures demanded by that "troika." Tsipras wants to raise the minimum wage, lower power prices for poor families, cut property taxes and reverse pension and public sector pay cuts.

Syriza officials have said they would seek a six-month "truce" to put the bailout program, due to end on Feb. 28, on hold while talks with creditors begin.

Greece, unable to borrow because of sky-high interest rates, has enough cash to meet its immediate needs but faces around 10 billion euros of debt repayments over the summer.

Without fresh cash, it will be unable to meet the payments, raising the chance of an exit from the euro.

(Additional reporting by Renee Maltezou, George Georgiopoulos, Lefteris Papadimas and Lefteris Karayannopoulos; Editing by Philippa Fletcher)

Anti-austerity Syriza party wins Greek election

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Editors' Picks

It remains to be seen whether Syriza had enough seats to govern outright or would have to seek support from other parties. In any event, the win by the radical left group could shake up the eurozone.

By Elena Becatoros, Nicholas Paphitis, and Demetris Nellas, Associated Press JANUARY 25, 2015

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A radical left-wing party vowing to end Greece's painful austerity program won a historic victory in Sunday's parliamentary elections, setting the stage for a showdown with the country's international creditors that could shake the eurozone.

Alexis Tsipras, leader of the communist-rooted Syriza party, immediately promised to end the "five years of humiliation and pain" that Greece has endured since an international bailout saved it from bankruptcy in 2010.

With 80 percent of polling stations counted, Syriza had 36 percent versus 28 percent for Prime Minister Antonis Samaras' conservatives.

It remained to be seen whether Syriza had enough seats to govern outright or would have to seek support from other parties. That might not become clear until Monday morning or even later, when all the votes are counted.

If Tsipras, 40, can put together a government, he will be Greece's youngest prime minister in 150 years.

The prospect of an anti-bailout government coming to power in Greece has sent jitters through the financial world, reviving fears of a potential Greek bankruptcy that could reverberate across the eurozone.

"The sovereign Greek people today have given a clear, strong, indisputable mandate. Greece has turned a page. Greece is leaving behind the destructive austerity, fear and authoritarianism. It is leaving behind five years of humiliation and pain," Tsipras told a crowd of rapturous flag-waving party supporters.

The party leader promised Greeks that that their country's regular debt inspections from their international lenders were a thing of the past.

He won on promises to demand debt forgiveness and renegotiate the terms of Greece's 240 billion-euro ($270 billion) bailout, which has kept the debt-ridden country afloat since mid-2010.

To qualify for the cash, Greece has had to impose deep and bitterly resented cuts in public spending, wages and pensions, along with public sector layoffs and repeated tax increases.

Its progress in reforms is reviewed by inspectors from the International Monetary Fund, European Commission and European Central Bank, collectively known as the troika, before each installment of bailout funds can be released.

Tsipras pronounced the troika "a thing of the past."

"The verdict of the Greek people ends, beyond any doubt, the vicious circle of austerity in our country," he said. "The verdict of the Greek people, your verdict, annuls today in an indisputable fashion the bailout agreements of austerity and disaster."

Greece's creditors insist the country must abide by previous commitments to continue receiving support.

The election results will be the focal point of Monday's meeting of eurozone finance ministers. Belgium's minister, Johan Van Overtveldt, said there is room for some flexibility, but not much.

"We can talk modalities, we can talk debt restructuring, but the cornerstone that Greece must respect the rules of monetary union — that must stay as it is," Van Overtveldt told VRT network.

Samaras conceded defeat, saying he had received a country "on the brink of disaster" when he took over in 2012 and was close to ushering it out of the crisis.

"I was asked to hold live coals in my hands and I did," he said. "Most gave us no prospect of lasting out and we did. We got the country out of deficits and recession ... and set the foundations for growth and a final exit from the crisis."

Syriza's anti-bailout rhetoric appealed to many in a country that, in the past five years of its financial crisis, has seen a quarter of its economy wiped out, unemployment above 25 percent, and average income losses of at least 30 percent.

But Syriza's victory has also renewed doubts over Greece's ability to emerge from the crisis, and generated fears that the country's finances could once again send shockwaves through global markets and undermine the euro, the currency shared by 19 European countries.

The centrist Potami party was battling for third place with the Nazi-inspired Golden Dawn, whose leader and several lawmakers campaigned from prison, where they are awaiting trial on charges of participating in a criminal organization.

If Syriza falls shy of the 151 seats necessary to form a government on its own in the 300-seat parliament, it will have to seek support from other parties — either in a minority government or as a coalition.

Sunday, January 25, 2015