By Brian Kesten
The tumult in Greece continues, as Alexis Tsipras’s left-wing Syriza party won the plurality of votes Sunday night. Just last month, Tsipras resigned as Prime Minister and called new elections to determine Greece’s political direction in the wake of Tsipras’s 86 billion euro bailout. The election will allow Syriza to renew a coalition with another anti-austerity group, the right-wing Independent Greeks party.
Meanwhile, the agreed upon reforms were not greeted with smooth implementation. New banking rules risk wiping out corporate deposits if Greek banks are otherwise unable to meet EU bank capitalization rules. Although EU negotiators sought to preserve these deposits, the reality of implementing bank reforms clashes with EU bank capital rules and could result in further destabilization of the Greek financial system.