Poll: Does Syriza’s Electoral Victory Alter the Likelihood of Greece Exiting the Eurozone?
The recent victory of the left-wing Syriza party in Greece is causing some indigestion in Europe. The party’s leader, Alexis Tsipras, ran on an anti-austerity platform, putting the new Greek government on a collision course with the “Troika” of the European Union, European Central Bank (ECB), and International Monetary Fund (IMF), which required austerity as a condition of its bailout.
According to Quandl/Trading Economics, Greece’s government spending increased almost 15%, from €30.9 billion in the 12 months ending Q3 2013 to €35.5 billion in the 12 months ending Q3 2014. This sharp increase in government spending occurred despite “constraints” imposed by the Troika and sharp declines in GDP. Moreover, the election suggests that Greece may cease attempts at compliance. Being locked into the euro prevents Greece from adjusting to its economic realities. The pressures for a Greek exit (Grexit) seem to be rising.
We asked CFA Institute Financial NewsBrief readers if Syriza’s victory will alter the likelihood of a Grexit. Of the 633 respondents, nearly 59% believe that a Grexit is now more likely, whereas 7% believe it is less likely. About 29% responded that Greece’s prospects of a Grexit have not changed, and only 5% were undecided.
Does Syriza’s victory in Greek elections alter the likelihood of Greece exiting the eurozone (Grexit)?
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
A simpler and more productive alternative to a Grexit is “FISCAL devaluation” – http://t.co/DSK0TwbBsn