The Greek Tragedy - a final act, an encore or merely a new chapter
Portfolio Manager, Skandia Investment Group
Post date: Wednesday, 9th May 2012
When over 2,000 years ago the great ancient Greek philosopher Aristotle wrote "the structure of the best tragedy should be not simple but complex and one that represents incidents arousing fear and pity", little did he know that he would be describing events in his country today.
As the country and financial markets digest the weekend's election results, fear and pity are observable in equal measure. Fear from the Greek people knowing that the Far Right Golden Dawn Party now has 21 MPs and the KKE Communist Party has 26 MPs, giving extremist views a strong platform. And pity from across the world as people try to comprehend the pain the people of Greece are suffering as this Greek tragedy lurches on.
So what now? Greek finances remain in a terrible state with a very real prospect that the country will run out of money in the summer.
The Greek stockmarket continues to spiral downwards, falling a further 10% post the election results. With the pro-bailout parties failing to agree a coalition, it falls to the anti-bailout parties to try and form some sort of government.
While this significantly increases the chances of Greece leaving the Euro, this looks premature, with many Greeks still believing that a future out of the Euro is more painful than remaining in it.
If no government is formed, then another election will be held in the summer, potentially becoming a ‘referendum' on remaining in the Euro.
In this scenario, the fears created by the Far Right and Far Left may be enough to shock the Greek people back towards the mainstream parties.
Ironically, it may be the mainstream parties that resort to the creating fear to shock the Greek electorate into realising that reverting to the Drachma is more of a step back towards Ancient Greece than they may think.