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If SYRIZA formed its own government, deposits would be withdrawn en masse and foreign investment in Greece would dry up, says Joerg Sponer, a senior manager in the Capital foreign fund. Sponer attended the presentation of SYRIZA’s economic programme in London, conducted by Giorgos Statakis and Yiannis Milios. SYRIZA’s headquarters, however, say that Sponer did not attend the London presentation of its programme by party representatives.

In his short memo, posted after the presentation, he maintains that the attending representatives of foreign funds sustained the impression they ought to sell everything they owned in Greece. The reason was, according to Sponer, that SYRIZA’s programme was even worse than that of the communists. Something else he shares with the stockholders and investors of the foreign Capital Fund is the opinion that if SYRIZA won an absolute majority at the elections there would be a repetition of the Cyprus scenario: mass scale run on banks, companies transferring whatever they could overseas and the ultimate termination of foreign investment.

In his confidential email, Sponer points out:

"Yes, I was at the meeting with Statakis (15 investors took part); I attended another meeting with Yiannis Milios, a senior financial adviser (with 20 investors).

In summary:

• Everybody who came out of that meeting felt like selling everything they possess in Greece.
• SYRIZA’s programme is worse than that of the Communists (they at least had a well-organised plan): chaos might only ensue if it were implemented.
• If it wins 36.5% of the vote, which would imply an absolute majority (together with the bonus of 50 Parliament seats), we are going to witness a scenario pretty similar to the Cyprus one: mass withdrawal of bank deposits, companies transferring whatever they can overseas and the drying up of all foreign investment.
• It is commonly believed that Prime Minister Antonis Samaras will not be able to gather more than 174 votes in March: written declarations have already been filed by deputies saying they won't support him.

If they weren't so serious while talking I would have thought the whole thing was a farce.

• "We feel closer to the Spanish Podemos and Die Linke in Germany even though they are too liberal."
• "We are going to stop the belt-tightening exercise: we even told people in the streets to hold their protests as we would take over and take care of them."

Five key points in their programme:

1.  Putting an end to the humanitarian crisis by the free-of-charge provision of electricity, food, shelter and medical care to all those who need them.
2.  Raising everybody's salary, with the minimum salary reaching €750 and being paid 14 months a year; pensions will hit €705 and be paid 13 months every year. Thousands of employees will be appointed by the civil service.
3. Achieving a primary surplus in the vicinity of 1% through tackling the grey economy. There will be no motivation to join the grey economy as more people will receive a basic salary of €750 per month (extremely funny!). There will be no taxes on property (they are worth €2 billion). All taxes will be slashed by 20% apart from those on the highest incomes (worth €2 billion), and all expenses will be covered with the €70 billion unpaid taxes. SYRIZA expect that the country's GDP will increase by 3-5% after the party’s victory at the elections as SMEs will be able to invest in an atmosphere of complete trust (LOL here); an upsurge in foreign investment is also expected.
4. Debt renegotiation:

• The European Central Bank is going to buy out the whole Greek debt for 60 years and will abolish all interest (in 1952 Germany achieved a slashing of its debts in the order of 62%, therefore Greece should be allowed to achieve something similar.)
• I pointed out that Germany at that time agreed to implement vast structural reforms but the two gentlemen (Milios and Statakis) retorted that Greece has seen too many reforms anyway.
• Greece’s debt-to-GDP ratio will reach 205% until 2080. (hahaha -a terrific joke!)
• The subsidies from Brussels will be increased by another €5 billion.
• Nobody in Brussels is going to win anything if Greece is struck out of the Eurozone. It holds a large share of the Greek debt, but Tsipras made a mistake by agreeing with Angela Merkel for Greece to stay in the Eurozone.

5. A memorandum on private debt with maximum servicing of 20%, with disposable income in excess of €750 per month.

• Credit analysis bureaus will be created to mediate between banks and borrowers. The bureaus will decide who will pay, what will be paid and what part of the debt will be forgiven.
• The Financial Stability Fund will recapitalise banks with €3 billion, which will be lost during the first year and restored during the second year (the two gentlemen declared this in utter seriousness) as the Greek GDP is going to swell dramatically as foreign investment flows in.
• The banks are too strong, and borrowers – too weak. They are going to change that.
• The managements of the three large systemic banks in Greece are going to be reshuffled 100% (with the exception of Eurobank where the government does not hold a majority package any more).
• Magistrates will be regimented into higher efficiency.
• I couldn't invent all that even if I wanted to."

A blow from BofA-Merill Lynch as well: SYRIZA’s programme is an ancient Greek tragedy

Apart from the Capital fund e-mail, which leaked on the web a few hours ago, Bank of America-Merill Lynch mentioned the meeting with Giorgos Statakis and Yiannis Milios in a message to its customers.

In its e-mail, the bank likens SYRIZA’s programme to a real ancient Greek tragedy, and points out that the party has no plan B in the event of non-acceptance of its position on debt relief, transfer of government bonds and an additional buyback scheme.

The bank also conveys the concerns among foreign investors caused by the fact that if SYRIZA wins the elections, Greece might turn into a negative example for other European countries to follow over again: Spanish elections are forthcoming and the left-wing Podemos (‘we can’) has the lead.

Bank of America summarises four key elements in what Giorgos Statakis laid down:

• No new reforms will be attempted.
• Europe needs to forgo the Greek debt.
• ECB must sell the Greek bonds it owns, and buy a lot more.
• There is no plan B in case creditors say no.

As a conclusion, the bank points out that investors should expect a heightened volatility in Greece over the next few months, adding that SYRIZA "is far away from the Troika and the current rescue programme. Even if some middle road is to be found, this could take the whole of 2015, with hazards continuing to loom large meanwhile."

BofA-Merill Lynch summarise the following key points in what Giorgos Statakis said:

• The IMF programme will be terminated, with the party being prepared to negotiate the next financial programme only with Europe.
• Talks will be held for the restructuring of public sector loans. Slashing the debt would be perfect, but the rescheduling of payments might be the first step in the right direction. A request will be filed with the ECB to postpone in time the Greek sovereign bonds in its possession.
• The Greek state will carry on servicing its sovereign bonds.
• Greece will stay on in the Eurozone no matter what scenario is chosen.
• No new privatisations will be carried out.
• No to primary surpluses, and no to balanced budgets. SYRIZA are expecting that the troika is going to revisit its unrealistic objectives at any rate, according to which Greece must produce a primary surplus of 4.5% of GDP over the next 10 years.
• The following funding sources will be made available: 1) restructuring the public portion of debt; 2) achieving access to markets; 3) transfer of Greek bonds owned by ECB; 4) adopting a Quantitative Easing programme by ECB.
• There is no plan B if creditors say ‘no’– or at least SYRIZA has not unveiled one.
• Increasing minimum wages and pensions up to pre-crisis levels and a restoration of the collective bargaining of wages.
• Adopting a more progressive tax system and combating tax crime. Traditional parties never had the political will to address these issues.
• Pressure is to be put on banks to ramp up their lending to the economy.
• SYRIZA is certain about March election results (Statakis even specified the date as 22 March). He believes the government might ward off early elections only if the troika dishes out everything it wants, which is highly unlikely. Quite the opposite, SYRIZA’s representative was surprised by the Troika’s tough position during the last round of negotiations.
• SYRIZA is adamant about its imminent election victory and hopes to be able to form a government on its own.
• An eventual agreement of the current government with the Troika would facilitate the future SYRIZA government as it would provide more time for negotiating the restructuring of the public sector debt.
• During the exchanges, most of the guests who were BofA-Merill Lynch customers, said they could not see how the rest of the European countries, never mind the ECB, were going to turn a blind eye and satisfy SYRIZA’s demands if the party failed to respect the agreement on the programme. Some also highlighted that the Europeans might wish to get tough on SYRIZA’s eventual government due to concerns created by the rise of the left-wing Podemos in Spain (the country will be holding elections in November, with the movement leading in the polls). They don't see any trumps up Greece’s sleeve during negotiations. Statakis replied saying that supporting Greece was in everybody's interest; the current programme was unsatisfactory for them and negotiations might lead to a more realistic solution, which would benefit everyone.