In short, while incentives are still in place for mainline Greek political forces to avoid extreme solutions that would lead to an interruption in the Greek rescue package, the risk is that lack of coordination and the prevalence of populist agendas in the parliament could potentially lead to the less desired scenario. The latest budget data shows that Greece may be running a flat-ish primary budget position, which may reduce the consequences if such risk were to occur. That said, it becomes hard to assess the hit in confidence and the financial turbulence involved in such a scenario. In addition, the failure to pay the arrears will be an additional source of shock for public sector corporations. Finally, the results could further estrange Greece from the core of Europe.
This is probably not good news.
At the very least, it will involve announcements about the 143rd final solution to the so-called “Greek Problem,” which is really the Eurobank problem.