The epic Greek saga of the June 17th elections appears to finally be nearing an end after New democracy’s leader Antonis Samaras was sworn in as the new prime minister of Greece.
In a ceremony held at the presidential palace Samaras pledged an oath to god in front of the heads of the Greek Orthodox Church. He said;”With the help of God we will do whatever passes from our hands to get out of this crisis,” it was his first statement as PM.
Samaras takes control of a shakily held together coalition consisting of his New Democracy party, former rivals Pasok and the small democratic left party. Already observers are commenting that the alliance will not last as power plays by various politicians have already gotten under way.
New Democracy won 129 seats in Greece’s 300-seat parliament on Sunday, followed by Syriza with 71, Pasok with 33 and the Democratic Left with 17. Between them, New Democracy, Pasok and Democratic Left have a majority of 29. Standing against them is Alexis Tsipras of the second placed SYRIZA party.
Nicholas Spiro at Spiro Strategy has cautioned that the formation of a Greek government is merely a “distraction from the deep-seated problems facing the country and the Eurozone in the coming weeks and months: “The only “winner” in Sunday’s election is Mr Tsipras. Not only has he won the argument that changing the terms of the bail-out agreement does not in itself equate to Greece’s repudiation of its membership of the Eurozone, he’s now in the political driving seat as a popular leader of the opposition. The New Democracy-led cabinet will be a weak and distrusted administration which will have to drive a hard bargain with the Eurozone if it wants to remain in office for longer than a few months.”
The Euro is currently holding steady after a press release from the G20 meeting in Mexico said that a new rescue package was being discussed for Italy and Spain. Head of the international monetary fund Chrisitne Lagarde said:
“We all are concerned about Europe, particularly the euro zone. In Los Cabos the seeds of a pan-European recovery plan were planted. This must be recognised. European leaders committed to take all measures necessary to safeguard the integrity and stability of the euro area and break the feedback loop between sovereigns and banks. Their intention to consider concrete steps towards a more integrated financial architecture is important, and I look forward to discussing this further when I visit Europe this week to finalize the IMF’s annual review of the euro area.”
Elsewhere the US dollar has suffered its second day of losses against the Euro as economists wait to see what action the federal bank will take to bolster the countries recovery. The fall however, is expected to only be temporary.
“The focus right now has been on the U.S. central bank and the possibility that it may further stimulate the economy, so that has helped put worries about Europe off to the side,” said Joe Manimbo, market analyst at Western Union Business Solutions in Washington.
“The weakness in the dollar is understandable but once that speculation is out of the way, and we know what the Fed is going to do, concerns about the Eurozone will come back to the fore,” said Simon Derrick, head of currency research at Bank of New York Mellon. “You wouldn’t want to hold Euros on a long-term basis.”
The Pound to Euro exchange rate is currently trading at 1.238
The Pound to US Dollar exchange rate is currently trading at 1.572
The Euro to Australian Dollar exchange rate is currently trading at 1.246
The Euro to US Dollar exchange rate is currently trading at 1.270
The Euro to Pound exchange rate is currently trading at 0.807
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