Greece, the post-election questions | FT Alphaville

Greece, the post-election questions

The New Democrats are off to attempt forming a coalition, Pasok’s busy making itself look important but will probably join, while Syriza says it’ll be “very powerful” in opposing them. It’s already conceded to, and ruled out allying with, the NDs.


Renegotiating the bailout

1.) How soon does the Troika renegotiation team touch down in Athens?

Oh, we already know: “as soon as a new government is in place to exchange views”, according to the Eurogroup reaction to the election results.

2.) Will they make that offer to lower the rate on the bilateral eurozone loans?

3.) In which case — how far are we getting to fiscal-transfer territory?

That’s if many countries end up lending to Greece below their own borrowing cost. The current loan margin sits at 150bps.

4.) Wouldn’t that be quite a eurozone precedent?

5.) As for the bailout programme proper, no change on the substance, said Jean-Claude Juncker. What does substance mean exactly?

6.) Does it rule out spreading out the Greek adjustment beyond 2014?

This seems to be the latest coming out of Berlin… Never mind it’s what the IMF staff suggested back in March.

7.) When the dust settles, what’s going to be this year’s primary budget target?

The IMF currently wants Greece to post a primary deficit of 1 per cent of GDP in 2012. That was already a retreat from the previous aim for 2012 to be the year Greece started posting a primary surplus. With the likely damage that’s been done to tax revenue and arrears in the months up to and since the first election… is the 2012 target set in stone anymore?

8.) But ultimately the Eurogroup wants the next (ND-led) Greek government to “take ownership of the adjustment programme”, which previous Greek governments have “committed to”. OK. How?

Presumably the Eurogroup knows just how loaded a term “ownership” is in IMF programme history…


And the really important Qs — Greek politics

9.) How pleased is Alexis Tsipras? Syriza now has more than a quarter of the vote, from less than 5 per cent in 2009. They probably can be “powerful” in opposition. They don’t have to negotiate with the Troika.

10.) The Troika won’t try and make Syriza sign a letter supporting the memorandum — will they?

11.) What comes first — definitive eurozone OSI, primary surplus, or another election?