Sunday, February 01, 2015

Has Greece imploded yet?

Happily for all but bearish hedge funds, Greece has not imploded as a result of the anti-austerity Syriza party and its anti-austerity Prime Minister Alexis Tsipras coming to power in the election a week ago. Although they spent the obligatory first week in power denouncing the Troika and its austerity program, he also started making some positive noises about paying the government debt. Granted, it's way too early to tell anything definitively, but Greece has certainly not imploded since the election a week ago.

Personally, I am reasonably optimistic that Prime Minister Tsipras will negotiate a new deal that almost certainly won't make anybody happy, but will at least allow Greece to move forward on a semi-reasonable path.

He will indeed attempt to roll back a lot of the austerity program, but I predict that a lot of that rollback will be fairly shallow and superficial or cosmetic and Greece will end up with what I will call Austerity-Light. The citizens will grumble that he didn't roll back 100% of the austerity program, but they will accept that he gave them a much better deal than anybody else was offering.

-- Jack Krupansky

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