MARKET BRIEFING – LONDON OPEN 16.07.2015
Greek members of Parliament talked late into the night in what turned out at times to be a strongly contested debate over the country’s much-maligned debt deal.
Although the vote to pass the legislation was never in doubt the Greek Prime Minister Alexis Tsipras had concerns that the fallout of his humiliating climb down would fracture and fragment the ruling SYRIZA party.
As expected the rupture within SYRIZA was large with many SYRIZA MP’s from the far left platform of the Party voting against the Governments legislation.
The most outspoken of the critics are Zoi Konstantopoulou who is the Speaker of the Greek Parliament and the former Finance Minister, Yianis Varoufakis. They were joined by other leading SYRIZA members who showed their contempt for the legislation by voting against it.
With SYRIZA now seemingly split between the moderates and radical left factions, Alexis Tsipras will now have to battle to hold is political party together. What remains of SYRIZA must be fearful of the political future of their party.
Tsipras was always the dominating force of the party. Therefore, if the Greek Prime Minister decides that he cannot go on in office and implement legislation that he clearly dislikes there is a strong possibility that the raptures in SYRIZA will force upon it a terminal decline.
The agreement that was reached in Brussels has been given a frosty reception both in Greece and by the International Monetary Fund. It is now becoming the acceptable view that some sort of debt adjustment must be made that will give the Greek economy space and time to breath and grow. However, the German Government and their friends within the European Union have so far blocked such a move.
This stance now means that Alexis Tsipras must take ownership of the legislation and implement it in its entirety in the face of stiff internal opposition. For Alexis Tsipras to be successful in his goal he will need to build bridges within the Greek Parliament with his foes in the New Democracy and PASOK political parties.
With a national unity Government in place the implementation of the much-needed reforms will be smoother as the administration will be able to marginalize the more extreme elements of the politics that can be found to the left and right of the political spectrum.
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