While making election predictions is not the focus of this website, making political calls is something that I would consider to be in my core competency, and my guess is that the people of Greece will be giving a plurality of votes to the anti-austerity party, SYRIZA. My prediction is that they will receive 22-25% of the vote and with the 1/6th seat bonus that the top party gets in the legislature, this will put them at 39-42% of the seats in the Greek parliament.
This will require them to make a coalition with one of the other parties in order to have any hope of forming government. In this respect, 39% is a lot different than a 42% result – 39% will require them to form government with the socialist PASOK, but 42% will give them more freedom to likely work with one the other minor parties and strike up the best deal with them from a position of negotiating strength. If they cannot form government, the other parties are sure to not form government and there will be yet another election.
What this means in the macroeconomic scope is that there will be yet further uncertainty in Greece and this will translate into continued focus on Greek domestic impact on the entire EU.
Can you provide some macroeconomic comments, Sasha, now that the election results are known? Looks likely that New Democracy and Pasok will go on to form a coalition in the next days. While Mr Venizelos has stated that Syriza will need to be included in a coalition, I doubt very much the former finance minister will hold out to the enormous pressure to form a government. I’m particularly interested in your views related to Greece staying in the EU given the election outcome.
The polarization of the vote was the fascinating result. Since the coalition is obvious (ND and PASOK) with 162 seats (assuming what I am reading on Wikipedia is correct), this does leave a 11 seat cushion.
However, if they continue with austerity measures, the civil strife there is going to get more aggressive and I wonder if this is going to cause another breakdown in government. SYZRIA is politically smart to not get involved with the government.
I am not surprized at SYZRIA’s performance, but was at the ND result. The Greeks at this point have little to lose by thumbing their noses at the EU and this result is probably stalling the inevitable – total breakdown of their system of govenment. I just don’t see how they can snap their fingers and get austerity.