This post was originally published in the Washington Business Journal’s WBJBizBeat Blog. | Washington Business Journal
The election results from Greece are in, and the good news for investors is that it appears likely that a buildable coalition will result. From unofficial counts, the centrist New Democracy Party pulled out a come-from-behind victory, beating the leftist (and anti-bailout) Syriza Party. New Democracy is accepting of the need to keep prior bailout commitments (although they would like to renegotiate the timing) as part of continued participation in the Eurozone. PASOK, the former governing party and also a centrist-type of party, while dropping into a distant third place, should provide enough votes to allow the New Democracy to achieve governing power. Importantly, Germany is signaling its approval and what it means for the Eurozone. The German Finance Minister, Wolfgang Schäuble, said it was a decision by Greece “to forge ahead with the implementation of far-reaching economic and fiscal reforms in the country”. Germany Foreign Minister Guido Westerwelle suggested that the New Democracy position of having more time to comply with its obligations is negotiable: “There cannot be substantial changes to the agreements, but I can well imagine talking again about timelines”. This Greek election/German concession, along with a proposal over the weekend presented by the head of European Central Bank to address the crisis and draft proposals circulating among European capitals concerning a greater banking union, seems to have brought Europe a step back from the ledge, at least temporarily.
Read more: What the Greek elections mean for investing