December 22, 2014
The eurozone news is getting thinner as we head into the Christmas season, except for the unfolding political drama in Greece, which is our main story today. Tomorrow will be our last scheduled briefing before the end of this year, but we will bring you updates on Greece during the holidays - though not necessarily in the morning.
The big news over the weekend was the last ditch bid by Antonis Samaras. He is suggested in an unscheduled televised address that 'pro-European' MPs who back his presidential candidate, Stavros Dimas, could get positions in an 'extended government' and to bring forward general elections to the end of 2015 instead of June 2016, Kathimerini reports.
With these proposals Samaras certainly makes sure that he can overcome criticism in his own ranks that he is not flexible enough to win over opposition MPs. it also gives him another possibility to portray Syriza as an irresponsible party that is shunning yet another opportunity for compromise, writes Macropolis. But is it enough to ensure the 180 votes needed in the third round?
Macropolis does the maths on the vote count and it does not look too good at the moment. Of the 24 independent MP's there are 9 who already declared they will not vote for the presidential candidate. Five did vote for Dimas in the first round. Of the remaining 10, two said after Samaras' intervention that they will back the candidate, while one said he won't. So even if Samaras can convince the other seven undecided, it only gives him 14 independent MPs, which means he needs another 11 from Dimar or the Independent Greeks. Dimar has already declared that it will not take up Samaras' offer. Three in Dimar were part of the initiative calling for such a compromise and can be expected to back Samaras now. But it is unlikely that all 10 MPs from Dimar will desert the party line they just agreed upon. This means Samaras needs to fish for votes with the Independent Greeks. That is not going to be easy, especially after bribery allegations made on Friday by Independent Greeks MP Pavlos Haikalis, who claimed that he was offered €3m to switch sides in the presidential election.
The Independent Greeks are known for their wild and unsubstantiated allegations, but these ones seem more serious, as the Independent Greeks have provided two secret recordings of the meetings between Haikalis and the alleged middleman. There are doubts about the authenticity of the tapes, the FT reports, but the case is serious enough to be investigated with the prosecutor expected to deliver a report as early as today. The allegations were taken up by Syriza and rebutted by the government.
If the probe is not able to show the affair to be an elaborate hoax or set-up, this climate of suspicion will weigh on the next two votes, and could keep some wavering MPs back from voting for Dimas, argues this article in Macropolis. Nick Malkoutzis (@NickMalkoutzis) tweeted that the climate turned really sour in Greece and that the acute polarisation leaves those in the middle trampled.
We also have stories on risk sharing for QE, plus comments; on Barry Eichengreen’s endorsement of shock-and-awe type QE; on a poll showing less support for Catalan independence; on Montoro’s latest proposals for debt mutualisation in Spain; about the bankruptcy of Spanish toll road operators and its implications, and about Paul Krugman’s model of what happens at the zero lower bound.