Last week, in framing the Greek elections, I reminded you that irrespective of who won the elections in Greece on Sunday, it was clear that Greece would be unable to hit their deficit targets. This is why the German government is already debating relaxing Greece’s austerity targets. The bailout package will be renegotiated. The question is under what terms.
New Democracy have signalled to the Germans that they have no good alternative to a negotiated agreement and so their negotiating position is weak. What that means if they are actually able to form a government is more austerity and further crushing economic depression in Greece. Clearly the economic situation is untenable and so I continue to believe this will lead to a Greek re-default and exit from the euro zon...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.