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Joy in Europe after Samaras’ victory

18 June 2012 / 17:06:38  GRReporter
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Rating New Democracy the first party in the second elections has made Europe and the credit partners of Greece relax. Italy's caretaker Prime Minister Mario Monti said after landing in Mexico, which is hosting the G8 summit, "A government should be immediately formed in Greece and the country should meet its obligations to Europe." Monti determined the Greek vote as an important message to Europe and believed that it would bring a greater relief to the old continent. Spanish Prime Minister Marion Rachoni stressed that Greek citizens have chosen the right path and the Minister of Finance of Germany Wolfgang Schäuble was clear that there was no easy way out of this situation, but the outcome of the elections showed that Greece was ready to continue on the path of reforms. The Dutch Minister of Economy said that Greece would have to continue with the programme of reforms to recover its public finances.

The representative of the Executive Board of the European Central Bank, Ewald Nowotny, told Austrian newspaper Kurier that the talks about the bailout to Greece should be immediately renewed. "The talks with the European Union, European Central Bank and International Monetary Fund must start quickly in order to cover the financial needs of the country."

"We expect Greece to swiftly form a government so that we can discuss with the Greek authorities about how we can help Greece so that Greece can return back to growth. We will of course work on the bases of the adjustment programme that was agreed between Greece and the euro area. And I want to send a very clear message to Greek citizens: We stand by you. We consider Greece a member of the euro area and the European family and we are ready to support in whatever way necessary so that we can return to growth and jobs," said European Commission President Jose Emmanuel Barroso after the announcement of the blue victory in Greece.

Barclays financial giant announced that the probable exit of Greece from the euro area was growing smaller. "A coalition government headed by New Democracy reduces the risk of Greece exiting the euro area," Barclays Capital analysts said. Political scientist Stathis Kalivas commented on yesterday’s victory of New Democracy in his personal Twitter profile in the following way: "For those disliking the Greek elections outcome let me say what an immense relief it is to wake up in a country with open banks." Kalivas referred to rumours circulating in Greece in the last two weeks, according to which local financial institutions planned to remain closed on the day after the elections if an anti-European force prevailed.

At the same time, some financial publications reported that Greek banks expect a wave of return of withdrawn deposits. In the last weeks before the elections, around five billion euro flew out of Greek banks and withdrawn deposits exceeded one billion euro in just one day. The losses were somewhat offset by the Greek mechanism for financial stability but in the long run, banks hope to further recovery due to the return of deposits to the Greek treasury.

Business circles in Greece welcomed with relief the taking of the helm by New Democracy. However, the representatives of the real economy are aware that the near future will not bring easy times. "The hardest is at hand," said Dimitris Daskalopoulos, who heads the Hellenic Federation of Enterprises. He explained that the new government would have to solve the problems of the state apparatus accumulated for years and to take effective measures to stimulate economic growth. Daskalopoulos urges the state to change its operating model and focus on production without ignoring social justice.

On the first day after the elections, the Athens Stock Exchange recorded a steady positive growth. On Monday, the Greek financial market closed with a jump of 3.64. The turnover exceeded 102 million euro and the main stock index reached 580.7 basis points. The most profitable sectors in the first day of the week were telecommunications (11.38%), tourism services (10.93%) and the banking sector (6.21%). The credit rating agency Fitch announced that the risks for Greece exiting the euro area have significantly dropped in the medium term. However, financial analysts stressed that the upcoming stringent financial constraints and painful structural reforms might weaken the government coalition headed by New Democracy.

Tags: EconomyPoliticsEuro areaGreeceCrisisElections 2012
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