New Democracy Leader "Will Honour Commitments to the EU; Euro Trades Higher; Coalition Review

Mish's Global Economic Analysis

Sticking with quotes from the Guardian Live Election Blog, New Democracy leader Antonis Samaras "Will Honour Commitments to the EU". 

 Samaras summarised his speech in English:

His party would honour commitments to the EU.
It was a victory for all Europe.
A call for all political parties that share objectives to form government.
Sacrifices of Greek people will be reflected.
Determined to do what it takes and do it fast.

That message is not going to play well with Greek voters given his pledge to change conditions.

Coalition Depends On Pasok

At this point it is up to Pasok. Will that party form a coalition government or not?


Results look something like this:

New Democracy will receive 29.53% of the vote, equivalent to 128 seats.
Syriza will receive 27.12% – 72 seats.
Pasok will receive 12.2% – 23 seats.
Independent Greeks will receive 7.56% – 20 seats.
Golden Dawn will receive 6.95% – 18 seats.
Democratic Left will receive 6.23% – 17 seats.
Greek Communist Party will receive 4.47% – 12 seats.

Unless Pasok is willing to enter into a coalition government, there is no likely coalition with New Democracy.

Then it would be up to Syriza to form a coalition.

Otherwise, look forward to more elections.Euro Trades Higher

Reuters reports Euro jumps broadly after Greek vote results 

 The euro hit a three-week high against the U.S. dollar after official Greek election projections showed parties committed to Greece's multi-billion-euro bailout were on course to secure a slim parliamentary majority.

The euro rose to around $1.2730 according to Reuters data in early Australasian Monday trade, from around $1.2655 late in New York on Friday. It hit its strongest since May 22 according to Reuters charts.

Addendum:

I had originally posted that the 50 bonus seats would go to Syriza  if New Democracy failed to form a coalition. Some pointed out that is not what happens. If so, then if New Democracy fails to form a coalition, then  no coalition is likely.

Throwing Bones to Greece; A Victory for Europe (or a Victory for French and German Banks)?

Throwing Bones to Greece

In the wake of New Democracy eking out a victory over Syriza in the Greek elections, the nannycrats are willing to toss a few bones to Greece.

For example this headline on Bloomberg says Euro Chiefs Signal Greek Austerity Softening as Summit Looms.

Only vague references in the article pertain to concessions."German Foreign Minister Guido Westerwelle said negotiators could consider giving Greece more time to fix its finances, telling ZDF television that the political gridlock over the past six weeks “has done damage.” 

The hope of nannycrats is that vague promises to "soften stance" will lead to a coalition between New Democracy and Pasok. Perhaps it will. Pressure on Pasok will be immense.A victory for Europe (or French and German Banks)?

The Irish Times reports New Democracy party hails 'victory for Europe' 

 The leader of Greece’s pro-memorandum conservative party has claimed victory in the country’s second election in as many months, describing it as a “victory for Europe”.

“The people of Greece have shown their will to stay anchored in the euro zone and honour our commitments,” said Antonis Samaras, in a victory speech delivered in Greek and English.

“They have voted for a European course and our stay in the euro. They voted for jobs, justice and safety. No more adventures.”

How is this a victory for Europe? How is it even a victory for Greece? The only victory is for the stock market and bondholders, at taxpayer expense of course.

"No more adventures" says Samaras. "Wanna Bet?" replies Mish.

Short-term Greece stays in the eurozone. The irony is, perhaps this will force Germany to come to its senses and say "you can have it".

A German exit will not happen as long as Merkel is running the show, but the moment the decision is put to voters of Germany in an official referendum, anything can happen.

I believe the German people are likely to (and should) say to hell with it all.  After all, the euro project has been a spectacular failure.