Greece - Through The Looking Glass

By: Ian Campbell | Mon, Jun 18, 2012
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Why Read: Because in some (and perhaps many) respects Greece can now be seen as a small, and hence comparatively easily understood, 'microcosm' of what may happen in other developed countries going forward.

Featured Article: Multiple articles and other media last evening and this morning have reported and discussed yesterday's New Democracy Party victory in yesterday's Greek election.

Commentary: It has been widely reported that Greece's New Democracy Party stands behind the necessity of austerity programs for Greece - albeit conditioned by statements that it intends to work to re-negotiate austerity conditions imposed by the terms of the existing Greek bail-out arrangements. It is also obvious that in the six weeks since the failed May 6 Greek General Election, the anti-austerity measure Syriza leftist party gained very significant traction. Official projections of yesterday's vote has the New Democracy Party and Syriza Party at 29.5% and 27.1% respectively. Aside from immediate issues as to whether a coalition government will now be formed in Greece, It is what happens from here that now will prove interesting, and worthy of careful observation from the perspective:

In this regard:

Consider carefully:

Goldman Sach's is reported this morning, in what is said to be a good summary statement:

"Overall, Greece will remain a source of uncertainty due to its macro-dynamics. The country is undergoing extreme economic pressures that are likely above and beyond austerity; prolonged uncertainty have led to a multi-year suppression in confidence and a collapse in credit growth, which has helped compress the private sector, create supply shortages and has contributed to the lack of investment or privatization efforts, higher structural unemployment and persistent inflation currently observed. Unless this uncertainty of tail events is lifted over Greece, moderate solutions will be prone to marginalization, while extreme and populist views could become ever so prevalent."

Greek vote no magic solution for EU
Source: The Financial Post (from Reuters, Caroline Valetkevitch and Edward Krudy), June 17, 2012
Reading time: 4 minutes

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
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