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Extraordinary parliamentary elections would take Greece to a bankcuptcy

06 November 2010 / 15:11:01  GRReporter
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Just few hours remain until the beginning of the elections for mayors and governors in Greece, but the question to which are seeking answer both voters and politicians is whether the Prime Minister will announce an extraordinary parliamentary elections if his party lost the local.
    In today's edition of the Italian magazine "Panorama" is published an interview with Georgios Papandreou, with the title "If I don’t win, Greece will vote again." More precisely, to the question whether his threat that in case of a negative result for PASOK he will dismiss the parliament is simply propaganda, the Greek prime minister said: "No, this is reality. If the affected by our reforms group interests say "enough, we have to stop the changes taking place", then there is nothing else I could do but to turn to the Greek people."
    According to him the outcome of the local elections is actually a vote of confidence to the government, and to the question whether this will lead to an atmosphere of political instability he responded with the question "What is instability? A government that can not carry out the necessary reforms or a government, which has been mandated to carry them out?".
    Asked whether Greece was threatened by bankruptcy George Papandreou also does not answer clearly: "Let me explain it like this: We are not directly threatened by bankruptcy, but we must keep a steady course to avoid this risk".
    Meanwhile, in an article in the economic magazine "The Economist" it is mentioned that for Greece extraordinary parliamentary elections would mean only one thing: that bankruptcy is closer than ever.
According to "The Economist" when the Greek Prime Minister set for the first time the "bomb" for premature elections, the return on government bonds jumped to levels that were reached in May, just before the intervention of the International Monetary Fund and the European Union. This time, things may become more complicated, warns "The Economist". The assessment of the publication of the result of extraordinary parliamentary elections is that most likely a lumbering coalition government will be elected, having in mind that most opposition parties have already declared themselves against the memorandum of economic aid. Such developments would lead to delays in budgetary consolidation and structural reforms to be postponed.
After all this it is not a coincidence that the spread-index of the 10-year government bonds exceeded 924 basis points - a value that resembles the reality from before the agreement with the IMF and the Athens Stock Exchange has been registering a decrease for days.

Tags: extraordinary elections Georgios Papandreou economic crisis politics
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