Monday, June 18, 2012

Morning Brief: Greece, France, Egypt

Three nations went to the polls this weekend and the results were a move to the right, a move to the left and a move into the Dark Ages – human beings remain beyond understanding.

In Greece, the second round of voting took place on Sunday, forced by the failure of the major political parties to form a working government following the vote in May. Despite poll numbers that showed that the leftist upstate SYRIZA could attain power, voters decided to vote for the status quo. New Democracy, the center-right party that vows to keep Greece in the Euro and to implement the austerity measures required by the bailout, won the largest share of seat in Parliament. SYRIZA came in second and now has cemented its position as the main opposition party. PASOK, the socialist party in power at the time the "memorandum" was negotiated was punished a second time and finished third.

This Samaras will also
face the Germans
The election represented a victory for the school of thought that the Euro equals Europe, and only by remaining in the Euro can Greeks realy be European. As a result, Antonis Samaras, the leader of New Democracy, will now work this week to form a working government, mostly likely with the help of one or more opposition parties – PASOK or Democratic Left.

One wonders what the impact of the Greek victory over Russia in Euro 2012 had on the election. Needing a victory to avoid elimination, Greece won the closely fought battle 1-0 to advance into the knock-out round where it will face, ironically, Germany.

As for investors, the news was, not surprisingly, a relief and seen as a victory for lenders. European markets are marginally higher today, though the Athens Stock Exchange index is sharply up over 5 percent in Monday trading.

In France, a country both geographically and philosophically at the heart of Europe, voters gave the Socialists a majority in the legislature. The move to the left was made easier by the fact that the issue of "Europe" was not at issue. Whereas the voters of Greece were presented by many media outlets and the leading parties with the view that the election was a choice between austerity and isolation, in France the issue was simply the wisdom of austerity versus a more growth oriented policy. Growth won, at least at the polls.

In Egypt, the center of the Arab spring, voters went to the polls and gave its votes to the Muslim Brotherhood. But the vote may be of little consequence as the military consolidated its power by granting itself new powers prior to the voting.

The move tightened the military's control of the state and may, in the end, kill off the notion that the Arab spring brought real democracy to Egypt.