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Victory of New Democracy, banking experts predict

15 June 2012 / 18:06:55  GRReporter
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Two days before the most critical elections in the history of Greece, recent estimates show a lead of around 4% for New Democracy against SYRIZA. Despite the ban on publishing opinion polls, fear that the country could find itself outside the euro area has prevailed in society in recent days and the majority of voters have decided to vote for New Democracy. Indicative of this development is the sharp increase in transactions on the Athens Stock Exchange on Thursday.

On the other hand, it seems that SYRIZA has reached the limit of its ability to attract more supporters than the rates in recent polls.

PASOK and the Democratic Left are maintaining their rates and Independent Greece and the Communist Party are recording loss of electorate. There is an increase in the number of voters for Golden Dawn, especially after the party’s spokesman, Ilias Kasidiaris, beat the "red" Liana Kanelli live on TV.

So, according to recent estimates, New Democracy is expected to win 30% of the vote, SYRIZA – 26%, PASOK – 12%, Democratic Left – 6.5%, Independent Greeks – 6%, Golden Dawn – 5.5% and the Communist Party – 4.5%.

Greek banks’ management bodies also believe that the possible outcome of Sunday's elections is the victory of New Democracy. The reason for this is not only secret polls, but also the results of betting on the Internet. The intentions of holders of bank deposits, many of whom rushed to banks to withdraw their assets on the eve of the election race, show the prospects for the victory of the "blue" too.

"The majority of depositors who withdrew most of their deposits are expected to vote for parties with a clear pro-European orientation, precisely because they fear a possible victory of SYRIZA," representatives of financial institutions said. In their opinion, the mass withdrawal of deposits is indicative of the sense of fear of Greece’s eventual exit from the euro area in case the parties supporting the cancellation of the Memorandum of financial assistance prevail.

"This is a very real poll. The panic in the last three weeks clearly indicates the intentions of the so-called "hosts". As indicated, the withdrawal of deposits from Greek banks has exceeded the amount of 1 billion euro in some days, whereas May is defined as the worst month of all time in terms of withdrawal of funds from bank accounts.

Banks, of course, have not been idle and have tried to prevent capital outflow by making attractive offers to depositors. Since early June, their management bodies have clearly ordered the branches to offer the highest possible interest rate in order to limit the withdrawal of deposits. The interest rate for amounts of even fifty thousand euro has grown to over 5% in just three months, and the depositors' ability to negotiate rates on larger amounts has greatly increased.

By no chance banks, which were reluctant to offer interest rates higher than 4% two months ago, have been offering interest rates of over 5.5% from the beginning of June.

Holders of deposits, who managed to bargain with employees in bank branches, have certainly benefitted because banks were willing to provide interest rates 1% higher than their official offers just to hold the funds of their clients.

In most cases, increased interest rates will not be in force longer than three months. This increase will be recorded in the official June report of the Bank of Greece and it is not excluded that that value may be a record high for the period following the introduction of the euro in Greece.

Bank representatives argue that if a cabinet is formed after the elections and if there is no probability of a conflict between Greece and its European partners, interest rates will fall. However, if no political stability is established in the country and uncertainty about the future persists, banks will not only continue with the attractive offers but will make them even more attractive.

Foreign banks report a positive turn in favour of pro-European forces. Royal Bank of Scotland analysts "see" a 90-percent chance of establishing a coalition government involving New Democracy and PASOK, which financial markets will consider a positive step.
Two days before the elections, embarrassment of a possible election victory of the radical left SYRIZA is expressed in all possible ways. The German edition Financial Times Deutschland published a short article in the Greek language in which it calls on the Greek voters to not "succumb to Alexis Tsipras’ demagoguery" and to not vote for him on Sunday.

"Dear Greek women, dear Greek men, try to obtain clear political conditions. Vote boldly for reforms rather than with anger against the hard but necessary reorganization. Your country will be able to remain in the euro area only with parties that accept the terms of international creditors. Oppose the demagoguery of Alexis Tsipras and SYRIZA. Do not believe their promises that it is possible to cancel all contracts without any consequences. Your country needs an operating public sector. We recommend New Democracy for its normal functioning, although we are reluctant to do so. For decades, New Democracy has been pursuing a wrong policy and bears some responsibility for today's misery. However, the best choice for the country would be a coalition government with Prime Minister Antonis Samaras, not Alexis Tsipras who wants to turn back the wheel of history and fools you, presenting a world that has nothing to do with reality."

Tags: PoliticsElectionsBanksDeposistsInterest ratesNew DemocracySYRIZAEuro areaFinancial Times DeutschlandHumanite
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