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Published 31 May 2012 09:09, Updated 01 June 2012 07:34
Very bad things ... A screen grab of the Credit Suisse chart giving probabilities for the outcome of the next Greek election. Source: Business Insider
A new poll suggests Greece’s anti-bailout Syriza party has taken the lead in the race to form the next Greek government when Greeks head back to the voting booth on June 17.
According to the Epikaira magazine poll, Syriza has 30 per cent of the vote, ahead of the pro-bailout New Democracy party on 26.5 per cent. Syriza’s platform supports continued euro membership for Greece but proposes scrapping the country’s current financial aid program.
A move by a new Greek government to dump the country’s hard won bailout support could have dire consequences for Greece, the euro zone and, by extension, the global economy.
Credit Suisse has produced a number of charts this month showing where the various players stand and what the implications are for Europe and the rest of the world depending on who wins. Most of the scenarios are not pretty.
According to one chart made available in early May, seven of the 10 parties contesting the next election are opposed to the European Union/International Monetary Fund program that many say is all that is standing between Greece, default and an untidy exit from the euro.
The front runner among those is Syriza, that has gained strength in some recent polls despite trailing the pro-bailout New Democracy and PASOK parties earlier this month.
Only two parties – right wing organisations Independent Greeks and Golden Dawn – support withdrawing from the euro in addition to abandoning the EU/IMF bailout package.
Business Insider, meanwhile, last week got its hands on a second Credit Suisse Chart, which it calls ‘A Very-Useful Chart To Prepare You For The Next Greece Election’, that maps out the percentage chances of pro- or anti-bailout parties winning at the polls, what the potential outcomes of each scenario is and how Greece would get there.
The upshot is that Credit Suisse predicted that there was a 40 per cent chance each of pro- or anti-bailout forces winning and a 20 per cent chance of stalemate. Only one of those options – a clear win for a pro-euro coalition – leads directly to a positive market outcome.
The other two give strong chances either of the need for yet another election, or a Greek exit from the euro, which Credit Suisse respectively describes as ‘market negative’ and ‘market very negative’.