The Greek elections: What to expect

GREECE

The Greek elections this weekend are set to prove a defining event in the eurozone crisis. Shamik Dhar and Stewart Robertson, both senior economists for UK and Europe at Aviva Investors, outline three potential outcomes and the implications for equity investors.

The Greek election this weekend could result in two very different outcomes. At one extreme, we could see the breakup of the euro area. At the other, we may be heading towards a much closer fiscal and political union. It is increasingly likely that Greece will either choose to leave the eurozone or be ejected by the other members after refusing to adhere to its austerity programme. If Greece does exit the eurozone, will it be an orderly departure or a financial and political rout? For investors, the answers to these questions have profound implications for the asset allocations they s...