Greek election: Reaction to Syriza’s victory – live updates – Telegraph.co.uk

“By contrast, bond yields from countries such as Italy, Spain and
Portugal are trading tighter as the outcome to the election was in line with
expectations. The Greek equity market is lower by around 3 per cent this
morning.”

12.13 French National Front leader, Marine Le Pen, welcomed the Syriza
win as “a monstrous democratic slap in the face by the Greek people to
the European Union”.

12.06 Turkey’s foreign minister, Mevlüt Çavuşoğlu, says Turkey
is ready to work with any government in power
. His comments came
during a conference with his Hungarian counterpart in the Turkish capital,
Ankara.

Quote
Everybody should show respect. We certainly respect the decision of the Greek
people. We are ready to work with any government elected to power.

Greece has an important role to plat in these matters. We are willing to
work together with Greece in both the restart of the Cyprus talks and easing
existing tensions.

12.03 Reuters is citing senior Syriza party officials telling them
economist Yanis Varoufakis is to be Greece’s next finance minister, barring
last-minute hitches.

“This is the decision, anything else would be a surprise,” a senior
Syriza official told Reuters. The move was also confirmed by two other
officials in the party.

Mr Tsipras is due to be sworn in today at 2pm and announce his cabinet
tomorrow.

Asked in an interview with Irish national broadcaster RTE on Monday if he was
ready to serve as finance minister, Mr Varoufakis said: “We shall leave
it to the incoming prime minister to make his decision. The reason why I
left a very cosy and cushy life at the University of Texas to come here was
not in order not to serve.”

11.52 Mr Dijsselbloem also ruled out any write down of the nominal or
face value of the €319 billion (£236 billion) in debts owed by Greece.

“On writing down debt on nominal value I don’t think there is support for
that,” he said.

Around 75 per cent of the debt is owned by the EU, ECB governments and central
banks.

There is some willingness to look at pay back interest rates, but they are
already low (less than Ireland) and there also possibilities for extending
the maturity of bonds, giving Greece more time to pay cash back.

So in terms of the overall value of Greek debt, that stays the same unless
Berlin and other creditors euro area countries agree that their taxpayers
will take a hit.

11.35 Earlier I quoted from the Dutch finance minister.

Here is the tl;dr version with some analysis from Bruno Waterfield.

Behind the tempting bait of warm words and diplomatic language there is
barbed hook for Alexis Tsipras.

Jeroen Dijsselbloem, the Dutch finance minister who chairs meetings of the
Eurogroup, was quick to say the EU will work with the new Greek prime
minister.

But, and it is a big one, only if Syriza honours previous Greek agreements
with the EU and IMF.

“Membership of the eurozone also means you comply with all that we have
agreed with each other. On that basis we stand ready to work with them,” he
said.

Those are the key words.

11.30 Jeroen Dijsselbloem, the Dutch finance minister who chairs
meetings of the Eurogroup, has arrived, Bruno Waterfield writes.

Quote
They have made a clear victory and of course I wish to congratulate them and
wish them a lot of success in their new jobs in Athens. Hopefully we’ll
start talks with them on cooperation very soon. We’re open for discussions
and look forward to beginning them.

We have already done a lot to reduce the debt burden for Greece over the
last couple of years in terms of interest and maturity, the length of the
loans. We have always said that we will continue to work with them if Greece
commits to what we’ve agreed with.

We always said we would come back to debt sustainability issues after
completion of the fifth review [the 28 Feb deadline] and that is still
pending.

We have extended the current programme until the end of February and the
possibility of another extension we’ll discuss today and also the Greek
government. It has to be a request from them of course.

I expect they will work with us to strengthen the Greek economy which is
crucial. We fully understand that a lot of work has to be done and we stand
ready to support them. Of course membership of the eurozone also means you
comply with all that we have agreed with each other. On that basis we stand
ready to work with them.”

11.23 Angela Merkel expects the new Greek government to uphold its
commitments to international creditors, her spokesman said.

“In our view it is important for the new government to take action to
foster Greece’s continued economic recovery,” Steffen Seibert told
reporters. “That also means Greece sticking to its previous commitments.”

11.19 The biggest danger for Syriza is a run on Greek banks if talks
with the EU do not show results in the run-up to a February 28 deadline to
do a deal with eurozone and IMF, writes Bruno Waterfield.

Greece has four “systemic” banks that could pose a risk, Alpha, National,
Piraeus and Eurobank which have high rates of state involvement ranging from
60 per cent to 40 per cent.

Those banks are dependent on €11 billion (£7.33 billion) in eurozone
bailout bonds now available to safeguard their capital needs in the Hellenic
Financial Stability Fund.

As well as that, in an emergency financial crisis, Greece can tap emergency
liquidity from the ECB worth up to €40 billion.

All that cash is conditional on the new Syriza government coming to terms
with the eurozone before the end of February when the EU, ECB and MF
“troika” report on whether Greece is meeting European conditions for aid.

If there are doubts that the deadline will be met then Greece could face a
bank run amid fears that the country’s financial sector will lose the EU
support it needs to weather a storm.

When I was in Athens two weeks ago a senior member of the City’s stock
exchange told me that was the greatest danger.

It also only takes one background ECB briefing to spook the markets putting
pressure on Syriza, a weapon that Frankfurt has deployed before to
discipline recalcitrant euro area countries.

The elections and Syriza’s fragile alliance means Greece faces political
instability and the danger of an accelerating run on the largely state owned
banks.

About €8 billion has been withdrawn from Greece in the past week alone.

11.01 The rest of us may ask ourselves: what does Syriza mean and what
does their win mean for the eurozone, Greece and beyond. But at JP Morgan,
they believe it’s a “Syriza-ous change to Greek politics” (direct
quote from an email from the firm)

Maria Paola Toschi, global market strategist, JP Morgan Asset Management, says
markets are in for a “period of prolonged uncertainty”.

His party’s fiscally expansive policies contradict the current agreement
with the Troika and potentially puts at risk the relationship with Europe as
well as the much needed financial support that the country still requires.
However, a Greek exit from the eurozone appears unlikely. Much rides on the
negotiations Syriza’s attitude to honouring the current agreements. Markets
could be in for a period of prolonged uncertainty as the negotiations
progress.

NB. The punning is not proving popular with all.

10.54 “Let us not beat about the bush [on foreign affairs, civil
liberties] we [Syriza and ANEL – Independent Greeks] are chalk and cheese,”
so said what some believe to be the likely finance minister, Yanis
Varoufakis, on Bloomberg.

10.48 Alexis Tsipras to be sworn in as Greek PM at 2pm, reports AFP
citing the presidency as its source.

10.43 Is this the moment the two men agreed a coalition – their smiles
definitely indicate the positive outcome of their short coalition talks

10.40 The Greek result is a “paradox”, according to Alan
Wilde, head of fixed income (global) at Baring Asset Management, an
investment management firm.

Quote
The Greek result is a great paradox in the sense that we are told the Greek
people are voting against austerity measures but wish to remain within the
Eurozone. In the next few weeks ‘headline risk’ is going to be high as
Syriza seek to re-negotiate bailout terms with the Troika.

Germany has reiterated this morning that the Greek people have a legal
contract with the Troika to receive more funds but if they break this and by
implication seek to re-negotiate the terms of debt repayment, no more funds
will be available in March and this will test the new Greek government’s
resolve. Brinkmanship is the name of the game.

10.32 Earlier this morning, European stock markets opened in the red
but they have now regained their composure after opening in the red as
traders digested the news, writes Denise Roland.

The FTSE 100 was flat at around 10am after opening down 0.5pc on Monday
morning, while Germany’s Dax, which started the day down 0.1pc, is up 0.8pc.

10.20 Syriza and their new allies, Independent Greeks, are strange bed
fellows. Their differences could herald a highly unstable new phase in Greek
politics as Mr Tsipras embarks on bruising negotiations with the EU and IMF
over the country’s massive debt and deeply unpopular austerity regime,
writes Nick Squires.


Like Syriza, the Independent Greeks are stridently opposed to the “troika” of
international creditors who have leant the country 240 billion euros (£180
billion), saying that Greece simply cannot pay the money back.

But beyond that, they have little in common with Syriza, raising fears of
even more uncertainty in a country battered by five years of recession and
political conflict.

While Syriza is a coalition of socialists, Marxists, Maoists and
Communists, the Independent Greeks are a conservative, nationalist party.

They were formed in 2012 by a breakaway group of rebels from New Democracy,
the conservative party of Antonis Samaras, the outgoing prime minister.

They also have close links to the Greek Orthodox Church, further putting
them at odds with Mr Tsipras, who is an athiest.

10.17 This graphic shows just how much of the vote Syriza won and the
share of their new coalition partners. Syriza more than doubled their seats
and New Democracy saw theirs drop by nearly 50.

10.13 UPDATE Notis Marias is no longer part of the European
Parliament’s Conservatives and Reformists group although he’s still listed
as one of them, writes Bruno Waterfield.

10.02 Perhaps not all of us were too familiar with new coalition
partners, Independent Greeks, but here’s one fact from Bruno Waterfield in
Brussels
.

Or as George Eaton, political editor of the New Statesman, summarises

09.55 For analysis of what the election results mean for Greece and the
eurozone from our man in Athens, Nick Squires, watch the video below.

09.54 The Independent Greeks, also referred to as ANEL, have 13 MPs and
with Syriza’s 149 MPs, this gives the new coalition 162 MPs – a working
majority.

09.50 COALITION CONFIRMED Greek election winner Syriza has gained key
support from an anti-bailout party to form a new government, writes Nick
Squires.

The right-wing Independent Greeks party said on Monday it would back Syriza
leader Alexis Tsipras to be the next prime minister, after he fell just
short of a majority needed to govern following Sunday’s poll.

The surprise alliance between two staunchly anti-bailout parties, spooked
markets and triggered a loss of nearly 4 per cent on the Athens Stock
Exchange as well as elsewhere in Europe.

Mr Tsipras has promised to renegotiate Greece’s massive bailout agreements,
but has promised not to take any unilateral action against lenders from
other eurozone countries.

09.42 Reports that a new government has been formed in the form of a
coalition between Independent Greeks and Syriza, according to the leader of
the former party, Panos Kammenos.

09.34 The Telegraph’s Questor editor, John Ficenec, writes in his
market
webchat
: The FTSE 100 has just about clawed its way back and is now
down just 0.15pc to 6,823

09.32 Vladimir Putin, the Russian president, wished the Syriza leader
success.

Mr Putin expressed “confidence that Russia and Greece will continue to
develop their traditionally constructive cooperation in all areas and will
work together effectively in resolving current European and world problems,”
the Kremlin said.

Mr Putin wished the party’s leader Alexis Tsipras “success… in the
current complex conditions” in a telegram.

09.25 Reuters reports the FTSE 100, which hit a four-month high on
Friday, was down 0.3 per cent at 6,810.58 points by 08.58am.

Greece’s ATG share index fell 3.7 per cent. However, some analysts expected
the events in Greece would have limited effect on equity markets overall.

09.21 Syriza won 149 seats – two short of an absolute majority – so
coalition talks begin, writes Nick Squires.

Today their leader Mr Tsipras will sound out forming a coalition with a
Right-wing, conservative party called Independent Greeks.

They will be strange bed fellows – the only thing they have in common is
that they are both stridently anti-Troika and anti-bailout.

09.19 The British actor, Hugh Laurie, offered his
congratulations to Syriza on Twitter which the party leader replied with a
simple thank you and referred to the actor as Dr alluding to the former’s
role as Dr House in the popular medical drama, House.

09.05 His victory wasn’t a surprise but it does leave many questions
for the future of Greece, the future of the euro and what will happen to the
relationship between Greece and the eurozone.

But right now, Mr Tsipras is offering his voters hope and change, whether that
is the case remains to be seen.

In the meantime, here’s a clip of his victory speech.

09.00 Could the UK see a result like Greece? The Green Party sure hopes
so, reports Ben Riley-Smith

The Green Party has praised the victory in Greece and called on the win to
trigger a similar Left-wing popular uprising in the UK.

Ms Scott Cato released a joint statement with fellow Green MEP Keith Taylor
saying: “Greens share the view of the new government that austerity is a
failed model which has piled misery on the poorest while making the
wealthiest even richer.”

It added: “This result shows that challenging business as usual politics
can win the support of the people. In the UK we are witnessing a Green
Surge, in no small part due to our anti-austerity agenda, and we hope the
Greek election result marks the beginnings of ordinary people standing up to
a discredited economic model and failing Governments across Europe.”

Meanwhile, former Green Party leader and the party’s only MP tweeted this last
night:

08.56 The victory has already sent European markets into the red,
reports Denise Roland, Szu Ping Chan and Ben Marlow.

European stock markets have opened in the red as traders digested the news
that anti-austerity party Syriza swept to victory in Greece overnight,
putting the financially-ruined country on a collision course with its
eurozone creditors.

The FTSE 100 fell 0.5pc on Monday morning, while Germany’s Dax opened down
0.1pc. Stock markets in the eurozone periphery were down more sharply, with
Spain’s Ibex and Italy’s Mib down 0.5pc and 0.9pc respectively.

Overnight the euro slid to a fresh 11-year low against the dollar of
$1.1098, having already taken a hammering last week after the European
Central Bank announced a bigger-than-expected €1.1 trillion stimulus
programme. It has since clawed back some of the losses, currently trading at
around $1.1198.

Asian stocks were also jittery overnight, with the Nikkei losing 0.3pc. In
Shanghai, stocks are down 0.1pc, while Hong Kong equities are off 0.8pc.

For
the market roundup, have a read here.

08.45 Hello and welcome to our live coverage of the reaction to the
Greek election result.

Already, Bruno Waterfield in Brussels reports Eurozone finance
ministers will today threaten an end to negotiations on debt relief for
Greece unless its new radical Left government promises to honour all
existing austerity agreements.

Eurozone officials are convinced that the EU holds all the trump cards in the
coming clash with Greece’s leader-in-waiting, Alexis Tsipras, including the
nuclear option of letting Greek banks collapse. They believe Mr Tsipras
knows his weakness.

Their concerns come after Syriza’s charismatic leader took 36 per cent of the
vote last night compared with 28 per cent for the conservative New Democracy
party of incumbent prime minister Antonis Samaras. The former will now be
looking to make a deal, possibly with the Right-wing, anti-austerity party,
Independent Greeks.

The Telegraph will be covering the latest reaction in the markets, in the EU
and politically to last night’s results.

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