Greece back in the spotlight, weighs on the Euro

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Greece

With two failed attempts at garnering a victory, Greece’s government heads into the final week of the year in a third and last attempt to elect Stavros Dimas, the government’s preferred candidate as the Greek president.

The voting, which was planned to have three rounds saw an inconclusive results during the first and second round, paving way for the crucial third round of voting due to take place on Monday, 29th December. A total of 180 votes is required to stake claim to the presidency, failing which the nation will head to national elections. Current consensus, with the nation gripped and fed up with rounds of austerity measures imposed has given rise to the anti-austerity party; Syriza which is widely slated to win should the nation head to elections. Syriza’s leader, Alexis Tsipras wants to the Troika to write off a significant part of the country’s debt, which is expected to reach as much as 150% of its GDP this year.

The uncertainty heading into the final round of votes has weighed in on the regional markets in Europe, with the Athens major stock index falling 2% last week as the second round of vote failed to elect Stavros Dimas.

The Greek Prime Minister, Antonis Samaras has been busy negotiating behind the scenes and had already offered a number of concessions to persuade the opposition to vote for the party’s preferred presidential candidate. While the concessions were welcomed by several independent candidates, as well as some from other parties such as the To Potami party, the second round of vote fell short of victory, with only 168 votes against the required 180 votes, pushing Samaras back to the negotiation table. Samaras had agreed to expand the government, cutting across political lines while also committing to holding elections before his term expires in 2016.

Should the third round of on the 29th, fail to win support for Dimas, the elections could throw in fresh round of uncertainty heading into next year and one which could have wider implications on other nations including the UK, which has seen the rise of the eurosceptic UKIP party and could also weigh in on the Euro, which comes at a critical time just when the ECB will be meeting to discuss its QE sovereign bond purchase program that continues to meet resistance from Germany.

The seriousness of the matter was stressed upon by the embattled Prime Minister Samaras, who over the weekend issued a final appeal to the law makers to avoid the snap elections, which could not only plunge Greece but Eurozone as well into a sovereign crisis. Samaras will have to try his best to gain 12 more votes in order to avoid the snap election, which could be held as early as in February 2015. The current stalemate comes just after years of austerity has seen the country starting to emerge out of the crisis, triggering welcome remarks by German Chancellor Angela Merkel calling it the first results of success.

The election outcome on Monday, will most likely bring some level of volatility into the Euro amidst lack of liquidity and with most of the markets trading on thin volumes in the yearend holiday season.

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