Just hours after the leader of the party New Democracy in Greece was given the mandate to form a government coalition, Antonis Samaras gave up. He said a coalition was simply “impossible”. Now it is time for the leader of the far-left group “Syriza”, that came in second in the elections, to negotiate a government coalition. From today they have three days to do that, and the leader Alexis Tsipras has already announced that he will try to form a cabinet that will reject the austerity measures.
Analysts say that it is unlikely that Tsipras will succeed with formering a cabinet that will reject the austerity measures that follows the loans from EU and IMF. German chancellor Angela Merkel has also underlined that Greece has to stick to the budget program in return of financial aid. These uncertainties creates political tumult in Greece, and according to one professor it is not clear “how they can survive within the euro over the longer term”.
German chancellor Angela Merkel also has to deal with a new French partner in European politics. After the french elections, Francois Holland, the new french president, has already succeded with putting growth on the agenda. Lots of media have speculated in the future relationsship between Holland, and German chancellor Merkel. Among them the German newsmagazine Der Spiegel. From USA this new strategy to solve the economic crisis seems to fit better with the american way to do it, although USA lost one of their closest allies in Sarkozy. Chief for the EU Commission, Jose Manuel Barroso, is to present new growth proposals today – http://www.eubusiness.com/news-eu/finance-economy.gdz.
The markets reacted heavily to the elections in France and Greece, but while stocks in Europe tumbled in the morning, they gained throughout the day and ended with a rise on 0.7%. Greek stocks did though remain in negative territory.
Spain is threat to the stability of the eurozone economy, but the EU Commission yesterday hinted that Spain might get a further deficit flexibility. Madrid has already been given leeway by eurozone partners to reduce its deficit this year to 5.3 percent of gross domestic product — as against the 4.4 percent of GDP initially decided, from the 8.5 percent logged last year.