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Greece is heating up.
Next month the Troika will visit and Greece will attemp to renegotiate its bailout with creditors.
PM Samaras meets with Germany on Friday.
It’s time to revisit and reassess what’s going on.
During my trip to Greece this past summer, I got to meet a Greek fund manager.
I asked him for his take on things right now.
Preferring to remain anonymous, here’s his take:
Regarding the situation in Greece, the feeling among the business community is that when the summer holidays end things will get worse. The Greek public cannot endure much more austerity and the German public cannot endure any more bailouts.
There is a fear that the Germans, now, want Greece out of the Euro. While it is possible for the coalition Government to agree on a set of measures, those measures may not be accepted by Europe. If the German mood truly sours on Greece then there is little any government can do. That would lead to an exit from the Euro, the stress of which would likely lead the country to new elections quickly.
Such elections would see a radical left Syriza victory and a very good showing from the neo-Nazi Golden Dawn party. If the Germans decide to continue aid to Greece and a more tenable solution is worked out (including possible ECB and Euro debt haircuts/restructurings and bailout extensions), it would be considered a victory for the coalition government and we would see elections again in 2-3 years. In which case Syriza would probably win but not as a radical left party but as a re-incarnation of the dying Pasok party. While elections are no guarantee in the next few months I think Greece will be the source of some dramatic headlines in the near future.
Greece stuff really cranks back to life this week. As NYT reports, Greek PM Samaras goes to Germany on Friday. We should know more soon.
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