Greek Elections: Is it Time to Buy or Sell Greek Stocks?
So the Greeks failed to elect a President, triggering a mandatory general election which is to take place on January 25th 2015. Where now?
To begin. Published polls are pretty unanimous in pointing to a Syriza win, albeit with a fairly tight margin. However, in order for Syriza to form a majority government, they need to get a minimum of 37% of the vote – this would give Syriza a parliamentary majority thanks to the automatic award of 50 seats that is given to the first placed party in the polls (technically 40% is required, equivalent to 101 seats out of the available 250 seats that are decided on the basis of proportional representation; however, this tends to be lower, depending on the % of the vote given to parties that don’t achieve representation – i.e., get <3% of the vote). So one scenario is that Syiza wins, but takes < the required 37% of the vote; in this instance, it could not form a parliamentary majority and would have to seek coalition partners. Continue reading