Last week’s government reshuffle is a non-event for investors, seen only of concern to the domestic audience, but the fact that Greece is heading to a general election – possibly before the fall of 2019 – is perceived as a positive development.
Fund managers and economists who follow opinion polls in Greece told Kathimerini that the markets would welcome a new government that would be more investment friendly. They are expected to closely monitor the announcements of Prime Minister Alexis Tsipras at the Thessaloniki International Fair next week, with the biggest question hanging over promises to suspend planned pension cuts.
Mujtaba Rahman, managing director for Europe at Eurasia Group, tells Kathimerini that the cabinet shakeup marked the beginning of an election period and is not expected to worry the market. He added that the fact Tsipras kept the same ministers in charge of key portfolios sends a message of continuity.
This, along with the New Democracy lead in opinion polls, means investors will not be too concerned. In fact, Megan Greene, chief economist at Manulife Asset Management, says investors would welcome the elections, as the markets would probably consider a conservative victory a return of Greece to safer and more predictable hands.