00:01, 6/17/12

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We are all waiting on results.

http://www.telegraph.co.uk/finance/financialcrisis/9336322/Greek-front-runners-vow-to-stay-in-euro-after-elections.html

"Greek front-runners vow to stay in euro after elections

Angela Merkel will have to “invent a way” to kick Greece out of the eurozone, a leading Greek politician has claimed, as all political parties promise to renegotiate the country’s €130bn (£105bn) bailout agreement after tomorrow’s pivotal elections.

George Stathakis, the left-wing MP for Crete who could become finance minister if Syriza clinch the Greek election, said his party intends to “stop at once” several conditions of the bailout.

Mrs Merkel, the German Chancellor, has warned that Greece’s membership of the eurozone is dependent on Athens sticking to the terms of the agreement. She underscored this position today, warning that Greece’s bailout will not be renegotiated.

“That’s why it’s so important that the Greek elections preferably lead to a result in which those that will form a future government say: ‘yes, we will stick to the agreements’,” Mrs Merkel said.

“We will have to speak to any government. I can only warn everyone against leaving the currency union. The internal cohesion of the eurozone would be in danger.”

But Mr Stathakis, an economics professor and one of Syriza’s key financial policymakers, said the party wants to stay in the euro but is prepared to call the bluff of Berlin and Brussels to secure a better deal for Greece.

“Germany will have to invent a way to throw us out of the eurozone – there is no mechanism now. So let them invent a process and we will discuss it,” he told The Sunday Telegraph.
“There are parts of the [bailout] memorandum we don’t like,” he added. “There are three or four elements that we would stop at once.”
Syriza’s leader Alexis Tsipras last week told a rally: “Brussels expect us, we are coming on Monday to negotiate over people’s rights, to cancel the bailout.”
Global traders fear that a collision between Athens and Brussels could lead to a Greek default and exit of the eurozone causing a shock just as the crisis has reached a fresh apex. Last week Spain’s borrowing costs surged to record highs that are considered unsustainable, pulling up Italian bond yields too.
European governments have 10 days to lay out a path towards fiscal union or risk the continent’s two-year crisis spiralling out of control, Pimco, the world’s biggest bond investor has warned.
“They have a summit at the end of the month and there are very big questions whether there is the willingness and ability to come up with answers,” said Andrew Balls, who runs Pimco’s European investments. “If the best they can do is say we need to think about it and come back in six months, there is a significant danger of this spiralling out of control.” On Friday European leaders, including Mrs Merkel, held telephone talks to try to form contingency plans for today’s Greek elections, including possible capital and border controls in case there is a run on the banks.
The leaders also discussed policies to take to this week’s G20 meeting in Mexico in answer to global demands for a solution.
Syriza has pledged to nationalise Greek banks, freeze the privatisation scheme and reverse labour reforms, including the reduction of the minimum wage. The left wing party, whose ascendancy alarmed Brussels, came second in the inconclusive elections on May 6. Although experts claimed it was a protest vote and Greeks are likely to back mainstream parties, New Democracy and Pasok, Syriza has maintained its lead in the polls. Victory for New Democracy is likely to keep Greece in the euro.
Mariano Rajoy, the Spanish prime minister, said today that the eurozone needs greater fiscal and political union if it is to survive the financial crisis. He added that his country’s businesses, banks and regional governments were struggling get access to finance, leading to crippling borrowing costs and urged further integration in the European banking sector.
“Europe has to transmit to the world that the euro is an irreversible project,” he said.
Mr Rajoy also accepted that Spain needed to stand firm in reducing its fiscal deficit.
“We cannot live beyond our means on a permanent basis,” he said. “We cannot have double the number of airports as Germany, for example."

Getting Greece out is trivial.  Simply end the loans.  No credit, no euros.

Greece will go into default at the next interest payment.

http://www.telegraph.co.uk/finance/financialcrisis/9336121/Judgement-day-in-Athens.html


http://www.guardian.co.uk/business/debt-crisis

• 

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• Greece: chronic insecurity and despair – welcome to life in a broken state

  16 Jun 2012: Nikos Konstandaras: Greece's challenges are in part unique but they also distil problems inherent in the rest of the continent 85 comments

• Like passengers on a runaway train, we have hurtled to the edge of a precipice

  16 Jun 2012: From Berlin to Washington, all eyes are on Greece in elections whose result will be felt around the world 88 comments

• Greek election: what could happen

  16 Jun 2012: The crucial vote could swing in several directions, from a Syriza-led radical coalition to political deadlock

• Greece prepares for election: 'we are going to the wall … things must change'

  16 Jun 2012: Greek voters, faced with choices many would prefer not to make, may take a leap of faith to an uncertain future

• EU leaders hold emergency talks as Greece prepares for pivotal election

  15 Jun 2012: Politicians fear tumbling stock markets and bank failures if voters fail to elect a pro-European government on Sunday

• As the crisis gets bigger, the politicians are getting smaller

  15 Jun 2012: Jonathan Freedland: The elections in Greece and Egypt will not determine their fate. Power has shifted to the markets, Brussels and beyond 369 comments

As Greeks Head to Polls Again, a Fear That No One Will Win

By RACHEL DONADIO and STEVEN ERLANGER

Voters will cast ballots for the second time in two months, worried that any government they elect will fail to resolve the political and economic turmoil that threatens Greece’s future.

• Whatever Greek Voters Decide, the Euro Looks Likely to Suffer

http://www.nytimes.com/2012/06/17/world/europe/in-greece-fears-that-voting-wont-resolve-turmoil.html?_r=1&hp

Greece will exit the euro.  Soon thereafter Germany will exit the euro.

Germany must do so or be insolvent.   I am guessing and am often surprised.


Good Luck.   Good night.

The returns are now in.    New Democracy has 129 seats.  

Negotiations will be attempted.  I doubt there will be a durable government.

http://krugman.blogs.nytimes.com/2012/06/17/and-then-what/

June 17, 2012, 2:41 pm

And Then What?

So it appears that the governing coalition in Greece has pulled out a narrow victory — winning only a minority of votes, but getting a narrow majority in the parliament thanks to the 50-seat bonus New Democracy gets for coming in first.
So they will now have the ability to continue pursuing an unworkable policy. Yay!
Joe Wiesenthal tells us that there’s a meme in Greece to the effect that Syriza didn’t really want to win, because it would rather see the current government flail some more. Conversely, establishment types should actually be dismayed by this outcome: if current policies fail completely, which seems almost a given, and Greece exits the euro anyway, which seems highly likely, the entire Greek center will end up discredited; better, in a way, to be able to blame the radicals.
And I gather I’m not the only one thinking along these lines; Business Insider also reports hints that Pasok, which has suffered terribly from its identification with failing policies, might not continue in the coalition unless Syriza is also brought on board — which then raises the question, why would Syriza do that?
The debacle rolls on."

The Socialists have an absolute majority in the French assembly.
France will not support Germany.
The final debacle is delayed.
.