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Greek Election Gridlock Risks Derailing Rescue Plan

Greek voters are unlikely to give any party a workable majority in elections as soon as next month, jeopardizing austerity policies on which bailout funds depend.
According to Bloomberg Opinion, surveys show as many as eight parties may win seats in the 300-member legislature. Antonis Samaras’s New Democracy leads with about 20 percent of the vote.
“All polls suggest the Greek elections won’t lead to a majority one-party government,” said Athanasios Vamvakidis, head European currency strategist at Bank of America Merrill Lynch in London. “Without a strong government in Greece that can implement the program, a disorderly default that could lead to a euro exit remains a possibility.”
The rate on government bonds maturing in February 2023 climbed 162 basis points to 20.07 percent since the close on March 12, the day the securities started trading after the biggest-ever sovereign debt restructuring. Yields for Portuguese bonds due in October 2023 were at 11.7 percent, while the rate for Irish securities maturing in March 2025 was 6.94 percent.
Like Greece, Portugal and Ireland required rescue funds from the European Union and International Monetary Fund. The pending Greek election comes during a fifth year of economic contraction. The unemployment rate was at a record 20.7 percent in the fourth quarter. More than half of young Greeks are out of work, and pensions and wages are being lowered.
(source: Bloomberg, Capital)

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