Jun 25 2012 |
more articles from
|
A tale of two elections
By Kathleen Brooks, Research Director, Forex.com Post elections, the future remains fairly bleak for Greece and Egypt, but it is the start of a long journey for both nations, writes Forex.com research director Kathleen Brooks.A week is a long time in politics, but it can also be a long time for the electorate to get the results they wanted. At the time of writing the presidential election run-off results in Egypt had been delayed yet again, so that officials could study appeals by both parties. Since both Morsy (the Muslim Brotherhood candidate) and Shafik (the former prime minister under Mubarak) have claimed victory this could take a while.
The Greeks, who also voted on June 17, had to wait six weeks to get a government after the first round of elections failed to give one party a clear majority and mandate to win power. While Greece and Egypt are two extremely different countries, they share a couple of things: One, the need for great change; and two, the outcome of these elections is incredibly important to the future direction of both countries.
Let's take Egypt first. After more than 40 years of a dictatorship, there was always a lot resting on this election. Not only was the Muslim Brotherhood pitted against the old guard, but the outcome of the election was hoped to bring to an end to the emergency rule of The Supreme Council of the Armed Forces. It's more than a year since Mubarak was toppled from power and the former leader has already been sentenced to life imprisonment, yet the people of Egypt still have no elected government and SCAF have assumed new powers while the people wait to find out who the new president will be. This has fuelled fears of a military coup, as the SCAF could limit the powers of the new president and interfere with their ability to act independently of the armed forces in the future.
While the second-round elections in Greece passed off without too many problems, the outcome - a win for the pro-bailout parties - doesn't make Greece's long-term future in the Eurozone any more secure. The "pro bailout" New Democracy Party has to hold together a fragile coalition government with its arch political rival Pasok, the Socialist party. If the coalition is to collapse then the radical left wing party Syriza, that polled second but saw a huge up-swing in support in the lead up to the elections earlier this month, could take the reins of power.
Greece and Egypt have some similarities: both have parties running in the election that offer something new and different to the old guard, but are both viewed with fear and in some cases suspicion by those inside and outside their countries. Both also believe they face suppression: in Greece it is financial and economic repression from the EU/ IMF and the ECB who insist on Greece extending its spending cuts and bolstering its public finances. In Egypt the repression comes from the SCAF, who some fear will try to keep power indefinitely.
Last but not least, political paralysis in Egypt and Greece threatens to make the growth trajectory worse in both nations, it could lead to higher unemployment and it delays the enormous challenge of getting their economies back on a sustainable track.
Post the elections from June 17, the future remains fairly bleak for Greece and Egypt. While they are symbolically important, elections are the start of a very long journey for both nations.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that FOREX.com is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Services Authority (FSA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, and the Financial Services Agency (FSA) in Japan.
© Forex.com 2012
© Copyright Zawya. All Rights Reserved.
Post Your Comment