A Greek Tale

marketsforu

We are talking about the newly created political party in Greece that was formed by rebels from the Syriza party.

Let us recall that rebels led by ex energy minister Panagiotis Lafazanis refused to vote for a deal with Troika that granted Greece the third bailout program and kept the country in the EMU. However, the leftist government that campaigned on a break from tough reforms had to pretty much continue on tough measures which has been seen as a treason by some the most leftist politicians.


Now that the snap elections are ahead of us in Greece, the new Popular Unity will try to use the same weapon Tsipras' Syriza took advantage of early this year to retake power from New Democracy. The PU, enjoying now 25 seats in the parliament is just about to try and form a government after New Democracy (predictably) fell and while chances for forming one are non-existent, the party will do all it can to steal support from Syriza.


Polls still favour Syriza with 28% support, but New Democracy is not far behind with 25% and Popular Unity already enjoys 8%. Markets and European partners would have nothing against a return of the most market friendly New Democracy but if the winner falls short of majority (a winning party gets 50 seats bonus in 300 mps parliament) keeping Greece under the bailout and thus in the EMU might look tough again.