Aug 25th 2015, Greece's pre election period is about to start

Athens, August 25th

Greece, political developments. Greece is heading to snap elections; most probable elections’ date appears to be September 27^th.

• The current Prime Minister Mr Tsipras is facing two threats which could end up losing party’s leading position: a) disappointment of his electoral base due to his recent u-turn in negotiations with creditors will increase abstention and this will impact mainly the leading party and b) the new Eurosceptic party (LAE) which was formed by the MPs and activists who left SYRIZA, could gain critical support vis-à-vis the centre right party of New Democracy.
• A new poll published by the German newspaper Bild, showed a reduction of gap between SYRIZA 28% (left) and New Democracy 25% (centre right). It also shows that LAE, the new eurosceptic Radical Left gains 8%. The number of current SYRIZA’s MPs, which either leave the party to LAE or announce that won’t participate in these elections, surpassed the number of 30 (out of 149)
• In addition, the Secretary of Central Committee Mr Koronakis stepped down, raising objections as regards the party policy during negotiations with creditors. However, it is not clear if his resignation is related to party’s policy issues or to a scandal concerning his systematic avoidance to join for compulsory military service.
• In general, it is too early to judge at this stage, the impact of SYRIZA’s rupture as regards the forthcoming elections. Additionally, it is very difficult to perform any market research during August due to holiday’s period. However, it is important to mention that among the MPs who left SYRIZA are 16 of the most popular MPs of SYRIZA. These MPs came first in terms of votes in their counties, among all candidates of all political parties, during the last elections of Jan’15.
• Last but not least, it is a matter of great importance to mention that although the Eurosceptic radical left part of SYRIZA doesn’t represent the majority of the party, it seems that it represents its most active part at grass-roots level and this will impact the overall SYRIZA’s performance in the forthcoming elections.
• The president of New Democracy (centre right) Mr Meimarakis attempted to form government   but failed to do so. The president of Democracy Mr Pavlopoulos gave the mandate to form government to the leader of the newly formed eurosceptic radical left party LAE, Mr Lafazanis. Mr Tsipras has rejected requests coming from both Meimarakis and Lafazanis as regards the formation of a new government.
• The name of the new Eurosceptic party is the abbreviation of LAiki Enotita which means Popular Unity (as it was the name of Chilean Leftish party of Salvador Allede, Unidad Popular 1970-73).
• After the recent government’s decision to close down the mines of the company “Hellas Gold” due to unclear reasons which are related to the internal party issues, the company made redundant about 2500 empolyees. Aa a result, over 30 miners are closed in a gold mine, protesting against government’s decision.
• According to local police, 78 protesters were during a demonstration against the investment of «Hellas Gold». It is important to mention that 68 out of 78 arrested, were foreigners (41 Germans) who participated in a international summer camp of radical left parties which protested against this investment.  

Greece, economic developments. The Athens Stock exchange Index experienced one of its worst days during the last few years.

• It plunged by 10.54% amid concerns about the Greece’s snap elections and global market volatility resulted by China’s crisis. All four systemic banks stock prices dropped by more than 20%. However, liquidity was kept at extremely low levels (39 mios euros)
• The 2 year bond yield increased by only 0.71% and was trading much lower than the levels before agreement with creditors (above 20% and up to 58%). The 10 year bond yield increased by only 0.28% and was trading much lower than the levels before agreement with creditors (above 12% and up to 20%). Both yields fluctuation showed a reduction of country risk due to the recent agreement with creditors and its approval by 222 MPs (out of 300).
• Greek tourism is on course for a new record in 2015 thanks to increased visitor numbers from the US, Germany, Britain, Balkans and Turkey. According to figures from the Bank of Greece, for the first six month of the year, foreign tourist arrivals increased by 20.8% to 7.56 million year-on-year. The Greek Association of Tourism Enterprises (SETE) estimates that as long as the election process results to a stable government, arrivals of foreign visitors will exceed a ttal of 25 million this year.
• An action plan to attract tourists to Greece all year round has been named ‘Dodeka’ after the Greek word for 12, and has been drawn up by the Hellenic Association of Travel& Tourist Agencies (HATTA). It includes the creation of a route related to the 12 Gods of Olympus and the creation of ancient Olympic sports
• Approvals for banking transactions gather pace. According to official data, around 60% of businesses’ requests to send money abroad are being approved by the Baking Transactions Approval Committee and local banks. Bank Deposits slightly increased in August (123 bios euros) compared to July (122 bios euros).
• The restoration of trust as a result of a) the formation of pro Europe government after elections, b) the successful recapitalisation of Greek Banks and c) the agreement of Greek debt restructuring will be the key factors for a return to normality as regards Greek Banking industry.