Greek Vote makes exit from Euro more likely

Greek New Democracy Party leader Antonis Samaras, speaks during a pre-election rally at Zappeion hall in Athens on May 3, 2012. Photographer: Simon Dawson/Bloomberg

Bloomberg News

Greek Exit Poll Casts Doubt on New Democracy, Pasok Majority

By Maria Petrakis and Natalie Weeks on May 06, 2012

• Tweet
• Facebook
• LinkedIn
• Google Plus
• 1 Comment

• 

Greek voters flocked to anti-bailout parties, an exit poll showed, throwing doubt on whether the two main parties, New Democracy and Pasok, can form a coalition to implement spending cuts to ensure the flow of bailout funds.

New Democracy led in the election today, receiving between 19 percent and 20.5 percent of the vote, an exit poll by Alco for state broadcaster NET TV forecast. Anti-bailout party Syriza got between 15.5 percent and 17 percent, according to the exit poll. Pro-bailout socialist Pasok got between 13 percent and 14 percent. Independent Greeks, a new anti-bailout party, could get as much as 11 percent of the vote.
“Greece needed this election like it needed a hole in the head,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said in an e-mailed note. “The exit polls confirm what has been patently clear for some time: there’s no political consensus for the kind of reforms that Greece must implement if it wants to remain in the euro zone.”
The results, if confirmed, may mean that New Democracy and Pasok won’t have enough support for a majority of at least 151 seats in the 300-seat parliament. Pasok won general elections in 2009 with 43.9 percent of the vote and New Democracy came second with 33.5 percent. This is Greece’s first national election since it helped trigger the European debt crisis, receiving two bailouts with pledges worth 240 billion euros ($314 billion) in return for pension and wage cuts and higher taxes.
Greece must continue spending cuts to keep disbursements flowing. Failure to do that may determine whether the country has a future in the euro area.

Pasok, Syriza

A separate exit poll by Kapa Research showed New Democracy with 16 percent to 19 percent of the vote and Pasok and Syriza tied with 15 percent to 18 percent.
Pasok spokeswoman Fofi Yennimatas said party leader Evangelos Venizelos, the former finance minister who negotiated the second rescue package, won’t comment until official projections are available at around 9:30 p.m. Athens time.
Opinion polls taken before the ballot suggested conservative New Democracy would place first, though without enough support to rule outright, leaving party leader Antonis Samaras with the option of teaming up with Pasok in order to govern.

Rescue Package

The two parties, which have alternated in power since 1974, were partners in the outgoing caretaker government of Prime Minister Lucas Papademos, which secured a second rescue package earlier this year, saving Greece from financial collapse.
Under the terms of that 130 billion-euro package, which was accompanied by the biggest debt restructuring ever, international lenders expect to hear in June how Greece will achieve 11.6 billion euros of savings for 2013 and 2014.
The exit poll today suggested as many as nine parties may enter Parliament, underscoring fatigue over austerity and frustration with the politicians responsible for implementing it. Unemployment is almost 22 percent and for those under the age of 24 it’s almost 51 percent.
Anti-immigrant Golden Dawn was seen getting between 6.5 percent and 7.5 percent of the vote, entering Parliament for the first time.
A total of 9.85 million Greeks, including 360,000 new voters, were eligible to participate today.
To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net; Natalie Weeks in Athens at nweeks2@bloomberg.net
To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net Craig Stirling at cstirling1@bloomberg.net   
end quote from:
http://www.businessweek.com/news/2012-05-06/greek-exit-poll-casts-doubt-on-new-democracy-pasok-majority

It seems fairly obvious that the average Greek voter has been so harmed by the austerities so far that an end to the austerities, a default, and a return to the Drachma looks more certain everyday. A supporter of the austerities in England said, "Greece needed these elections like a hole in the head."

Though I understand this last statement, as far as the real needs of the average Greek are concerned they likely at least in the short run might be better off with the Drachma once again. The bigger question is what that is going to do to the Euro and the European Union. Because what is good for the average Greek is not at all what might be good for the Euro or the European Union. So, this is a real paradox that might be repeated in country after country like Portugal, Spain, Italy and even maybe France over the next few years. One wonders where all this will end?