Further change is on the cards for Europe, following the win by the Syriza party in the Greek national elections. The left-wing party has always pledged to end the country’s austerity programme, yet has announced its desire to remain in the Euro.
Syriza may have emerged as the largest party in Greek elections yesterday, but it fell just short of an overall majority, which means coalition negotiations will now have to begin with other parties in order to form a government.
Greece, and wider Europe, now face further weeks of uncertainty while the country re-establishes a leadership.
Alan Wilde, Head of Fixed Income, Global at Baring Asset Management, predicts what this could mean for the Eurozone. “The Greek result is a great paradox in the sense that we are told the Greek people are voting against austerity measures but wish to remain within the Eurozone.
“In the next few weeks ‘headline risk’ is going to be high as Syriza seek to re-negotiate bailout terms with the Troika. Germany has reiterated this morning that the Greek people have a legal contract with the Troika to receive more funds but if they break this and by implication seek to re-negotiate the terms of debt repayment, no more funds will be available in March and this will test the new Greek government’s resolve. Brinkmanship is the name of the game,” he said.