Greek Cabinet eagerly awaited
January 27, 2015
As observers in Athens and around Europe waited on Greece's new Cabinet, trading began with a small rebound for the European common currency.
Having hit an exchange rate of less than $1.11 on Monday, before closing at $1.1234, the euro recovered a little more ground during Tuesday's morning trade in Europe and Asia, reaching $1.125.
The euro was buffeted late last week by the European Central Bank's decision to launch a quantitative easing program - printing fresh money in order to buy up government debt - lasting up to 18 months. This policy sent European markets soaring, but devalued the eurozone currency.
Sunday's election victory for the left-wing Syriza party, which has voiced objections to many of the austerity programs undertaken in Greece in exchange for loans from EU partners and the International Monetary Fund (IMF), put further pressure on the euro.
Syriza won 149 of 300 available seats, and on Monday agreed to form an alliance with the right-wing Independent Greeks party. Despite considerable ideological differences, both groups agree that the terms of Greece's so-called "bailout" should be revisited.
Radical academic Varoufakis for finance post?
The man tipped as the most likely candidate to negotiate with the EU and IMF on this matter in future is Yanis Varoufakis, a 53-year-old economist who spent much of his life in academia in Britain, Australia and the US. He only departed from the academy to join Syriza's election campaign, leaving the University of Texas to become part of Tsipras' team.
A prolific blogger in English, Varoufakis chose to paraphrase Welsh poet Dylan Thomas - or perhaps recent blockbuster sci-fi "Interstellar," which repeatedly quotes the poem in question - when celebrating Syriza's win.
"Greek democracy today chose to stop going gently into the night. Greek democracy resolved to rage against the dying of the light," the holder of Greek and Australian citizenship wrote.
Varoufakis, who has pledged to take on Greek oligarchs and corruption, is often critical of conventional economic wisdom. He has likened himself to "an atheist theologian ensconced in a Middle Ages monastery," as he rallies against the budget rigor and structural reforms favored as the solution to Greece's debt difficulties.
Jeans versus Juncker
In a blog post announcing his candidacy as a parliamentarian, the academic - who tends to favor jeans and bright shirts over a staid suit - wrote that this recipe amounted to "a cynical transfer of banking losses onto the shoulders of the weakest taxpayers."
Greece's new government woke on Tuesday to tentative promises of help from its international creditors, albeit usually coupled with warnings that the country must stay its path of economic reform.
"We stand ready to continue supporting Greece, and look forward to discussions with the new government," the IMF's Christine Lagarde said in a statement responding to the election.
The European Commission president, Jean-Claude Juncker, told German public broadcaster ARD on Monday night that there was "no urgent need for action" on Greece's debt, saying that a write-down or so-called haircut "is not on the radar."
Veteran Luxembourg economist Juncker, for years the head of the group of eurozone finance ministers, would stand in stark contrast to Greece's recently retired teacher from Texas. So would German Finance Minister Wolfgang Schäuble, a conservative who has faced criticism at home for setting up a debt-free German budget, even though Berlin does not have debt problems akin to those plaguing Athens.
msh/gsw (AFP, dpa, Reuters)