Impact of Left Wing Greek Election Win.

Impact of Left Wing Greek Election Win.

The Greek people have spoken and they have voted for a total move away from the right wing, austerity (spending cuts) to get the Greek economy back on track and voted for a fledgling left wing party (Syriza) that was only formed in 2004.

The message offered by Alexis Tsipra, the 40 year old leader of the Syriza alliance, has clearly proved popular. The Greek people are clearly ‘fed up’ with spending cut backs and mass unemployment and in indeed 50% youth unemployment. It is not difficult to understand why the people have voted for a young, popular speaker with a message of no more cutbacks, government spending and we will wipe off half of Greeks National Debt. Easy to say, difficult to deliver.

Syriza are just short of an absolute majority, but only needing a couple of ‘coalition’ agreement seats to secure a majority, it is certain that Mr Tsipra will take control.

What of the future?

The vote, whilst not a surprise in the victory, has surprised most commentators in its scale. We suggest markets will react nervously this morning. Mr Tsipra has suggested that Greece will not leave Europe but making bold claims of getting half of Greek’s debt written off, will acceptable terms for all, we see as difficult, although given the European Central Bank, agreeing to ‘buy back’ €60bn of debt each month as part of its QE proposals, gives such scope for negotiation, as the ECB has clearly shown a will to ‘print’ money.

Stock markets will likely fall today and we expect the Euro to tumble against both the dollar and the pound.