Syriza, the economists and the impossible triangle

Michael Roberts Blog

All the polls show that the leftist Syriza alliance is set to win the general election in Greece next Sunday.  It may not get an outright majority and may have to form a coalition with one of the small centre parties.  But it looks most likely that the incumbent coalition of Samaras’ conservative New Democracy and the degenerated social-democrat PASOK will lose power.

Financial markets are getting worried and Greek government bonds have dropped sharply in price as investors fear a default.  Greek banks are losing deposits as Greek corporations and the rich (or at least those that have not already done so) shift their euros overseas.  Three banks are now asking for what is called Emergency Liquidity Assistance (ELA) from the Greek central bank (in effect, liquid funds from the Eurosystem controlled by the European Central Bank).

So what will happen if Syriza becomes the government next week?  A…

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