The euro is trading at the lowest level since August 2012 ahead of Greece’s parliamentary vote for a new president on Monday that will determine whether Greece is headed to hold snap elections before February that could alter the course that the indebted country takes with the European Union.
On December 9th Greek financial markets plunged nearly 13 percent and the yield on Greece’s 10 year bond spiked to over 8 percent, a level that is considered unsustainable, after Greece’s Prime Minister Antonis Samaras named former European Commissioner Stavros Dimas as his coalition’s candidate for president and later tried unsuccessfully in December to get the 180 parliamentary votes needed to endorse Dimas and avoid a snap election.
The final attempt to the get 180 needed votes from Greece’s 300 seat parliament will come on Monday.
If Dimas is not endorsed by majority on Monday, snap elections will be held in early February and fears of Greece defaulting on its loans and potentially exiting the 18 nation euro-area will likely be rekindled.
Prime Minister Samaras’ New Democracy Party barely edged past leftist Syriza Party during the June 2012 elections.
Recent polls indicate that Syriza is poised to gain the majority of votes in the event of a new snap election held in early 2015.
Syriza is fundamentally opposed to accepting the bailout terms of the European Union and the IMF that contains belt tightening austerity measures along with fiscal reforms.
In May following elections, Syriza Party Leader Alexis Tsipras had some harsh words to say about austerity measures.
“Austerity has led to the creation of political monstrosities” Tsipras said before calling for write-downs on Greece’s €240 billion ($290 billion) debt burden.
Greece is facing repayments of €5bn in the early three months of 2015.
The so called “Troika” consisting of the ECB, EU, and IMF have only been willing to extend financial support to Greece through the end of February.