Beware of Greeks bearing gifts.
The Greek elections held on Sunday with the Syriza party winning, is another sign that a nationalistic furor may be sweeping the European continent.
As the Swiss and Dutch did earlier this month with their currencies, the Greeks voted for a populist party, which wants the Greek economic malaise to end with a Greek solution. Not coming from Frankfort or Brussels.
Austerity measures of the last 3 years have taken its toll on the southern tier of Europe. From Greece to Spain and all ports in between lackluster growth with a strong euro have curtailed trade and job creation.
Unemployment in the PIGS from younger people is running at about 20 percent -25 percent. Nationalistic movement have sprung up across the continent as countries battle with stagflation, recession and national identity, surely in this environment a common currency is the lynchpin to any far left or right political party.
As more countries hold local elections the austerity movement is growing old and tiresome. ECB chief Mario Draghi admitted as much in his EQE (European Quantitative Easing) speech last week, stating growth is needed to pull the EU out of this recession.
As more European countries look inward for economic solutions and not to Brussels or Frankfurt, a host of internal problems may lead to a more nationalistic solution for immigration and employment. France’s ultra right political party has seen it popularity grow after the Paris shootings.
Surely the monetary moves by Swiss and Dutch to cut ties with the euro, while initially harmful to their respective economies — due to artificial levels — can be seen as nationalistic as the spike in their currencies normalize.
The world will find out very soon on how the new Greek government will deal with ECB on its debt repayment. But don’t be surprised if Athens tells Draghi and company we will not pay your ransom to stay in a currency that is tattered and torn. Long live the drachma may be their response as movements grow to return to the peseta and lira.