Juncker warns of Syriza win consequences

Euro warning as Greeks face crucial election dilemma

GMT 16:12 2012 Saturday ,16 June

Arab Today, arab today Euro warning as Greeks face crucial election dilemma

Eurogroup chief, Jean-Claude Juncker
Brussels - AFP

Eurogroup chief, Jean-Claude Juncker Eurogroup chief Jean-Claude Juncker warned a radical left victory in Greece would have "unpredictable" consequences for the Eurozone as Greeks fed up with austerity prepared for Sunday's elections. "If the radical left wins, the consequences for monetary union are unpredictable," Juncker, who leads Eurozone finance ministers and is also Luxembourg's prime minister, said in an interview with the Austrian daily Kurier.
His comments were echoed in Germany by Wolfgang Bosbach, a leading lawmaker and close ally of Chancellor Angela Merkel, in excerpts from an interview with Frankfurter Allgemeine Zeitung to be published in full Sunday.
"If the radical left carries on saying it wants the help of all the other countries in the Eurozone but does not offer anything in return, then it will only be a matter of time before Greece exits" the euro, Bosbach said.
The radical left Syriza's firebrand leader Alexis Tsipras has vowed to tear up a bailout deal that has given Greece a credit lifeline in exchange for steep budget cuts and says he will renegotiate with creditors from scratch.
"The bailout deal is already in the past. It will be history for good on Monday," the 37-year-old said this week. He has given himself a 10-day deadline for negotiations -- in time for a summit of European leaders on June 28 and 29.
The Syriza party chief says the mood in Europe is shifting against austerity and that the European Union and International Monetary Fund will not want to risk a Greek euro exit that would send shockwaves through the global economy.
At his final election rally in Athens, Tsipras accused his rival, conservative New Democracy leader Antonis Samaras, 61, of defending German Chancellor Angela "Merkel's Europe of the past." "We guarantee the Europe of the future," he said.
Samaras wants a more moderate renegotiation of the deal and accuses Tsipras of playing with fire. At his last campaign rally, he said: "We will exit the crisis. We will not exit the euro. We will not let anyone take us out of Europe."
In public comments at least, European leaders warn that Greece must respect its international debt commitments or risk leaving the Eurozone club, and the EU and the IMF have suspended loan payments until after the elections.
IMF chief Christine Lagarde said talks with a new government in Greece must resume "next week." "We have time to do a new review of the current programme which will have to be started quickly, after a cabinet is in place," she said.
"We do not really know what has been implemented, what has been respected or not in the last six or eight weeks," she told French daily Liberation.
Meanwhile Spanish Prime Minister Mariano Rajoy meanwhile said he was confident Greece would stay in the euro and "respect its engagements."
"Europe must help Greece and Greece must fulfil its engagements," he said.
Greece has already been forced to seek bailouts twice, first for 110 billion euros in 2010 and then for 130 billion euros this year plus a 107 billion euro private debt write-off -- for a total of 347 billion euros ($439 billion).
For many Greeks a fine-tuning of the terms of the loans may not be enough as public anger is rising against the steep pay and pension cuts seen since the crisis first exploded in 2009, setting off a chain reaction across Europe.
Greece is now in its fifth year of recession, and many young Greeks are voting with their feet by emigrating, while local media reports warn that the state will run out of cash to pay public sector salaries and pensions on July 20.
"We want the euro, but we also have to live. We can't sacrifice everything," said Syriza supporter Meri Primi, a 45-year-old teacher in Athens whose salary has fallen by 400 euros over the past two years to 1,100 euros ($1,390) a month.
At a New Democracy rally, one party supporter told AFP on condition of anonymity: "I hope fear will win out over anger" -- a reference to party leader Samaras's threat that a vote for Tsipras could bring back the drachma.
No one party is expected to win enough votes to secure a majority in parliament, and the days to come are likely to be dominated by coalition talks.
Analysts say that New Democracy would find it easier to form a coalition if it wins -- although it might struggle to secure a strong majority in parliament.
Syriza would find it harder to form a leftist coalition, analysts say.
"Both scenarios are not very easy," said Vassiliki Georgiadou, a political science lecturer at Panteion University in Athens.
Polls open at 04:00am GMT on Sunday and close at 16:00pm GMT, with exit polls due immediately afterward and the first indicative results expected after 18:30pm GMT.

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