Sep 12-13th 2015, SYRIZA surges but polls still show a narrow lead

·         New polls reconfirm that Greek elections are too close to call. More specifically,

·         GPO’s poll showed a) a narrow lead of SYRIZA by 0.2% vs. New Democracy (ND) i.e. SYRIZA was recorded at 26% vs. while ND’s at 25.8%. ND was ahead of SYRIZA by 0.3% last week) b) Meimarakis’ popularity is still ahead of Tsipras’ one i.e. 45% vs. 42.9% c) 42.5% of voters are in favour of an all-party government and d) new Commons will consists of 9 political parties.

·         University of Macedonia’s poll showed a SYRIZA’s lead of 1% vs. ND i.e SYRIZA was recorded at 28.5% vs. ND which was recorded at 27.5%. The same poll was showing both parties’ popularity to be equal, last week.

·         Metron Analysis’ poll showed a narrow SYRIZA’s lead of 0.3% vs. ND i.e. SYRIZA was recorded at 25% vs. ND which was recorded at 24.7%. The same poll was showing ND ahead of SYRIZA by 0.6% last week.

·         EIB’s Hoyer stated will step up its operations in Greece regardless the result of forthcoming elections. EIB will focus on dynamic companies which pursue international strategies. EIB’s exposure is currently at 18 bios euros. 

·         Greece’s Ministry of Labour announced that the number of employees who were fired was higher than those hired by 16.7K, in August. Historically, this balance is positive during summer because of tourism.

·         Exports (without fuels) increased by +7% in July (annualised), despite capital controls, which is higher than July 2014 (+3.6%). On the other hand, exports including fuels decreased by 8% in July (due to drop of oil prices). Exports (without fuels) increased by +12.8% during the period Jan-Jul vs. a decrease of -2.3% during the same period last year.

·         Industrial production decreased by 1.6% in July 2015 (annualised). There was a decrease across all industrial sectors except electricity (+13.8%), pharmaceuticals (+5.8%), metals (+1.2%), tobacco products (+13.7%) and electronic products (+90.3%).

·         Sales of new cars increase by 25.8% in August vs last year. Sales of new cars were increased by 18.9% during the period Jan-Aug vs. 23.9% in 2014.

·         S&P maintained Greece’s rating at CCC and C as regards its long and short term debt respectively. It also predicts an economic contraction of -3% in 2015 due to capital controls. However, it stated that risk of Grexit has fallen below 33%.

·         New homes planning permissions increased by 14.8% in June 2015 vs. June 2014. However, new planning permissions refer to smaller surface (-9.2%) and volume (-14.8%).

·         Deadly clashes between Turkish forces and PKK the militant Kurdish organization, have intensified since a ceasefire collapsed in July. Residents in the mainly Kurdish town say they have been unable to buy food or medical supplies since the military imposed a curfew eight days ago. Turkey launched a security operation against Kurdish militants in Cizre last Friday, which has killed at least 19. Nils Muiznieks of the Council of Europe called the developments "distressing" and urged Turkey to allow independent observers to assess the situation in Cizre, which is home to more than 100,000 people.

Risk assessment

Greece is heading on snap elections amid deterioration of all leading economic indicators and fluid geopolitical landscape in Turkey and Middle East. A new strong, pro Europe government needs to be in place just after elections.

Despite new polls which suggest a neck and neck battle between SYRIZA and New Democracy, the big picture refers to a reduction of overall political risk and a consolidation of recent U-turn which occurred when Tsipras agreed with creditors on 3^rd MoU.

Although Tsipras’ popularity has been significantly decreased, and in some polls is lagging compared to his rival Meimarakis, he remains the main political figure of local political system. In addition,  Tsipras’ participation in the new government will facilitate the implementation of the structural reforms which are included in MoU because he is the one who agreed on terms and conditions of it.

PASOK (centre left), which is the political party which ruled Greece, the most during the last 4 decades, seems that gradually recovers some of its traditional electorate and fights to gain the 3^rd position from Golden Dawn (far right).

More specifically, although PASOK gained 44% in 2009 elections, lost most of its popularity because of austerity measures associated to the 1^st MoU (2010). Its power gradually reduced to levels below 5% (it gained 4.68% in the elections of January 2015). Practically, the recent Tsipras’ U-turn have justified its initial PASOK’s decision to sign off the 1st MoU with creditors. It is highly likely that PASOK will participate in the coalition government which will be formed by SYRIZA (in case that the latter become first in terms of votes).

Considering that a) the narrow gap between the two main rivals and b) 10-15% of voters are still undecided, this part of local electorate will determine the winner. This is due to the fact that undecided voters, voted mainly SYRIZA in January's elections; in addition, these voters, traditionally voted PASOK in the past, who saw that SYRIZA did exactly the same as their traditional favourite political party. Last but not least, PASOK has elected a new female leader, who  carries a historic name for PASOK voters.

This means that the increase of PASOK's popularity, if any, will determine if SYRIZA will win the forthcoming elections.