Greek market fears ease over election

AP News
Posted: Jan 12, 2015 9:57 AM
Greek market fears ease over election

ATHENS, Greece (AP) — With less than two weeks to a general election, Greece's financial markets were steadying Monday — a sign investors are a little less concerned that the result could lead to the country dropping out of the euro.

By midafternoon in Athens, the yield on Greece's 10-year bond was down 0.66 percentage point at 9.32 percent. The main stock index was up 4.3 percent.

Despite the improvements, Greek bonds and shares are still faring worse than when the election was called at the end of 2014.

Opinion polls indicate the Jan. 25 election will see the anti-bailout Syriza party come first ahead of conservative prime minister Antonis Samaras' New Democracy.

However, easing market nerves somewhat, Syriza leader Alexis Tsipras said in a weekend interview that a government headed by his party would honor upcoming debt obligations in March. Many investors are worried that his left-wing party could unilaterally renege on the country's bailout loans.

Syriza is demanding that more than half of Greek bailout debt — totaling 240 billion euros ($283 billion) — be canceled, arguing that a sustained recovery after six years of recession is impossible otherwise.

Syriza would probably need to form a coalition to govern, but its chances of an outright win are increasing as voters focus on the two main parties and ignore alternatives.

"There are indications that the first two parties are pulling ahead ... leaving the small ones behind," Alexis Routzounis of the Kapa Research polling company told the Associated Press.

The polarizing electorate, he argued, reflected a clear choice facing voters between taking a consensual or confrontational line with bailout lenders.

"What counts now, is whether the 12-15 percent still undecided will split with the mindset of a two-party race, or scatter to the smaller parties they previously supported."


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