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Monday, May 28, 2012

Euro opinion polls point to more fudge

Some interesting opinion polls from the heart of the eurozone from the last couple of days:

In Greece, a series of polls shows momentum ahead of the country’s re-run election next month shifting slightly from the radical left anti-bailout and austerity SYRIZA party to the pro-bailout and austerity centre-right New Democracy party, though SYRIZA is still set for gains compared with its election result earlier this month. New Democracy, which won the elections with 18.9%, now leads with between 25.6% and 27.7%, a lead of between 0.5% and 5.7% over SYRIZA. That means that together with the establishment socialist PASOK party, which won 13.2% at the elections, a pro-bailout coalition could be formed with a majority of seats in the Greek parliament, something that evaded the parties last time.

The polls also showed support for staying the euro at 65% versus 25% against. While staying in has enjoyed a consistent majority, voters are potentially starting to re-align their party choice accordingly - realizing perhaps that ripping out the bailout package comes with massive risks - albeit this could change again before the elections and remember, SYRIZA remains the joker in the pack.

Meanwhile in Germany, public opinion seems to be shifting in the anti-euro direction, with an opinion poll published on Friday by German state TV ZDF finding that 79% of respondents rejected eurobonds as a solution to the crisis, which is a stark reminder for the rest of Europe how far away we actually are from eurobonds. Interestingly, though, support for euro membership itself was also waning, with 50% (up from 43% in February) saying they believed it carried more disadvantages than advantages for Germany, with 45% taking the opposite view (down from 51% in February).

These opinion polls - together with events of recent weeks - point towards one conclusion: we're looking at yet more fudge. As we've pointed out before, as sceptical as one might be about the future of the euro, there's still considerable scope for negotiations on all sides of the Greek crisis, and therefore, chances that the country can find a settlement and agreement with its creditors after the elections that allows it to stay in the euro remain strong. It would be different if the public were to turn against the euro itself, which it isn't at this time.

The stakes are simply far too high for another round of Russian roulette.


Rik said...

What I understood from a Greek:

-the largest party in an election gets 50 bonusseats. Obo of outher sources as well btw. Meaning this will change the percentage required to form a majority government whether or not the biggest party is in it.

-SYRIZA is not one party but a coalition of parties (and as a consequence will not, even when it is the biggest, be entitled to the 50 bonusseats). So these always should end up (under the present circumstances with the party of the guy who transferred his money to Belgium)>

Idris Francis said...

As I said from the floor at your Spain - too big to fail? debate a few months ago, they can faff around and fudge and pretend and bury their heads in the sand as much as they like, but there is no possibility whatever of Greece staying in the euro.

As Paul Krugman just said on Newsnight, staying in the euro means poverty without end, and the people will not stand for it.

Steven James said...

Rik- SYRIZA, is registered as 1 party and as such will be entitled to the 50 bonus seats if they are the winners. It is only coalitions that form between 2 separate registered parties that can not claim the bonus seats. E.g. a coalition of SYRIZA and the KKE can not claim the seats post election.

I can not place any faith in the polls as they were so tragically wrong before the May 6th election.
1 poll by GPO showed SYRIZA getting only 6.2% and was wrong by nearly 11%. Yet the same poll was wrong by only 1% when it came to ND or PASOK.
Another poll by Alepouda's Infographics suggested SYRIZA would get 9% of the vote and was wrong by over 7%. Yet the same poll was only 1% out with it's estimates for all other parties.
There were many more similar results. Perhaps it was not deliberate, but a more conspiratorial mind might suggest something intentional.

Still I believe Idra is right, the Greek people will not tolerate the mess they are in any longer and SYRIZA will probably win. If only I could trust the polls I saw today, saying SYRIZA had over 30% of the vote!!!