The risk of early parliamentary elections in Greece, possibly as soon as January following Prime Minister Samaras’s decision to dash for an early presidential election, has sent a shockwave through the stockmarket.
It had its worst day since 1987, seeing 10.5% wiped off share values as investors ran to sell out.
“If you have an international investor in the country you are exposed to, and it’s going into elections, or there is a possibility that the country will go into elections and you don’t know the final outcome, then the easiest decision you can make is just to sell and get out,” said a financial analyst at Attica Wealth Management, Theodore Krintas.
Ten-year bond yields rose half a percent on the news, which carries the risk that parliament will not agree on a new Head of State, and this would trigger an election at a time the leftwing Syriza opposition is riding high in the polls. A Syriza government would likely renegotiate much of Greece’s imposed austerity package.
