The Athens stock exchange is getting hammered this morning. It’s already down 4.29%, down below 1,000 for the first time this year, with polls showing a fresh political crisis looming for Greece.
Greece’s 10-year bond yield is also back above 7% for the first time in six months. During the euro crisis the yield went far higher, above 30% at times. But with the Eurozone’s industry grinding to a halt, investors are on the lookout for any distress in the currency union’s struggling periphery.
This is being put down to a poll out this morning which shows Greece’s radical, left-wing and anti-austerity party Syriza well ahead of all other parties. They’re 6.5% ahead of the governing conservative party this morning.
If Syriza won, they have suggested that the country could leave the euro, raising the prospect of “Grexit” (Greek exit from the eurozone), something that investors thought they’d seen the end of. It’s not a one off either: a poll last week showed a similar lead for the radical leftists.
There isn’t a Greek election scheduled for a couple of years, but it’s not exactly uncommon for the country to have snap elections. Syriza are really in the lead, and would set Greece on a completely different course, and it doesn’t feel like the rest of Europe is awake to that fact yet.
There’s also the issue of the Greek government’s desire to exit their bailout plan early. Prime Minister Antonis Samaras is keen for Greece to sever precautionary lines of credit from international lenders, but Bloomberg says eurozone finance ministers are much more sceptical.