BUSINESS

Snap election in Greece to have positive impact on economy: experts

TAGS: Finance, Politics

The results in this Sunday's European elections in Greece, and the ensuing announcement that the country will hold snap general elections by the end of June, were welcomed by the markets, as analysts expect the Greek economy to benefit from the political developments although the snap poll might inflict some collateral damage, experts told Xinhua on Monday.

Greek Prime Minister Alexis Tsipras conceded defeat in Sunday's European Parliament election and announced his intention to ask for parliament to be dissolved after next Sunday and for the country to hold early general elections. The likely date is June 30, some three months ahead of schedule.

The Greek stock market reacted with major gains on Monday, while the yield of the benchmark 10-year Greek bond temporarily fell to an all-time low just a few hours after Tsipras' announcement.

"It is positive the elections are brought forward. We should not have to wait for the other shoe to drop. It would have made no sense to wait until October, with the economy in limbo," said Vassilis Theocharakis, professor of economics at the University of Athens.

Dimitris Kenourgios, associate professor of finance at the University of Athens, agreed by saying "this is very good for the economy as it will likely free it from the uncertainty and the various problems it has recently faced."

"There is renewed optimism in the economy after a long time, and it is important the Sunday vote was not just negative toward the government, but also positive to the opposition's plans for the economy," he commented to Xinhua.

The snap poll might also inflict some collateral damage though. Theocharakis explained to Xinhua that "the most important is the delay to the scheme for the protection of the primary residence of debtors, with the profiteers already out to snap properties up at low prices, so that might be a problem if the platform for that purpose is delayed."

The two experts both believed that the administration to emerge from the upcoming general election will have to hit the ground running.

"It will need to act fast as soon as it takes over, because it will enjoy no grace period. It will likely be able to handle all these issues, probably more efficiently than the current one, working in better cooperation with the country's creditors and enjoying the support of the markets and the investors," anticipated Kenourgios.

Meanwhile, Theocharakis is not so certain about that. He told Xinhua that "this is hardly a source of hope for the economy, as very little is expected to change when the opposition comes into power. It is likely to reverse some of the policies in favor of workers and reduce expenditure on healthcare and education."

[Xinhua]

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