Greek politics could return to the headlines early next year
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Back in June 2012, Greek politics dominated headlines around the world when the radical left-wing party Syriza led the election.
The prospect of Syriza leading the Greek government triggered a sell-off in global stocks as investors feared that its anti-Europe stance would result in a severing of international aid and eventually Greece’s forced exit from the euro zone.
The catastrophic scenario was averted by a thin margin as a centrist New Democrat Party won a small majority. Since then Greece has faded out of the global spotlight.
But the topic of Greek politics could return to focus early next year. In late January to February, the Greek parliament will have to elect a new president.
The Greek president is a figurehead holding little political power, so from a market perspective, it does not matter who he is. But the important issue is that a failure to elect the president will result in the dissolution of parliament, which in turn, will bring about the uncertainty of an election.
For the election of the head of state, a parliament majority of 60 per cent or 180 votes is required. The coalition government only has 155 votes or 52 per cent. Failure to garner 180 votes will force the government to call a snap election.
EU politicians and investors would resent the uncertainty of an early election. To make matters worse, the anti-euro Syriza Party is leading opinion polls. The party is expected to win 25 per cent of the votes if an election occurs.
The incumbent coalition leader, the New Democrat, is expected to come second with 20 per cent.
The Greek presidential election could be the first risk event next year. Even though the outcome has little economic significance, markets could be more volatile leading up to the vote.
Komsorn Prakobphol is head of strategy at Tisco Wealth. He can be reached at www.tiscowealth.com or [email protected].
