The Greek elections are finally here and the outcome is currently up in the air as Greek law prohibits poll results from being published in the country. We have been monitoring this for most of the morning and wanted to give you the most current outlook. If no coalition is formed, then the Greeks face the probability of a hard default rather than soft default as soon as July. After Sunday, the Greek parties have about 48 hours to form a coalition, which would determine whether or not Greece stays in the eurozone due to how it will proceed with austerity pledges and financial commitments.
Much of the international media reporting has full of hype and sensationalism with grandiose headlines, and we have tried to smooth that out.
The Financial Times in London reported that the Greek vote was set to end in stalemate, with neither the New Democracy Party nor the Syriza coalition ending up with more than 30% of the vote.
A Wall Street Journal article has the banking group IIF showing that the eurozone rescue funds are insufficient to aid a large member of the currency areas.
Either way, the Sydney Morning Herald on its “June 18” front page shows that Greece will ultimately leave the eurozone and the outcome of this election is unlikely to temper that inevitability.
And finally, here The Telegraph shows a primer on what would happen to Greece if it leaves the eurozone.
For some comparisons on actual size here, the numbers are staggering and it is no wonder that so many Americans cannot grasp how one of the smallest nations in Europe matters so much. Here are some basic statistics from the CIA World Factbook, using 2011 or the most recent data:
- Greece‘s population was 10,767,827, and its public sector accounts for about 40% of gross domestic product and with per-capita GDP about two-thirds that of the leading eurozone economies. Tourism provides 15% of GDP. The economy contracted by 2.3% in 2009, 3.5% in 2010 and 6.0% in 2011. GDP was put at about $308.3 billion in 2011, at purchasing power parity, and that is only #41 in the world. GDP per capita is $27,600 (49th in the world). Greece’s labor force is 4.959 million, about 46% of its population as of 2011. The Economist puts the unemployment as of March at 21.9%.
- Germany‘s population was 81,305,856 and it is the fifth-largest economy in the world. GDP contracted 5.1% in 2009 but grew by 3.6% in 2010 and 2.7% in 2011. GDP was put at about $3.085 trillion. GDP per capita is $37,900 (29th in the world). Germany’s labor force is 43.62 million, about 53.6% of its population as of 2011. The Economist put unemployment at 6.7% as of May.
JON C. OGG