Europe's Golden Dawn?
The leader of an extreme-right, anti-immigrant party on course for shock success in Greece's general elections has lashed out at those he described as "traitors" responsible for the country's financial crisis and said his party was ushering in a "revolution".
The far-right Golden Dawn party is set to win 7% of the parliamentary vote, according to early projections, as Greeks punished the traditionally dominant parties who backed harsh austerity measures tied to debt-relief agreements.
Parties must exceed a 3% threshold of the vote to be represented in Greece's parliament. In the last general election in 2009, Golden Dawn received only 0.29%. It has seen its support jump as a wave of anti-immigrant sentiment has spread in financially devastated Greece.
Golden Dawn leader Nikolaos Michaloliakos said his party had delivered a blow against the country's corrupt leadership.
"They slandered us, slung mud at us and shut us out of all the news media – the TV channels of the corrupt elite – and we beat them," the 55-year-old leader said as the votes came in.
"The day of national revolution by the Greeks has begun against those who are selling us out and looting the sweat of the Greek people."
Golden Dawn campaigned hard against illegal immigration, and its supporters have been blamed for a recent spike in inner-city street attacks against mostly Asian immigrants.
The party's supporters, routinely seen intimidating immigrants in run-down parts of the capital, wear black shirts, and its emblems resemble Nazi insignia.
But Michaloliakos has rejected the neo-Nazi label widely used for his party, stressing that it is staunchly nationalist.
Referring to immigrants, Golden Dawn's campaign slogan in TV ads was: "Let's rid this country of the stench."
Javad Aslan, a spokesman for Greece's Pakistani immigrant community, urged other political parties to work together to isolate Golden Dawn.
"This is dangerous for everyone who is living in Greece," Aslan said. "This [result is] unbelievable for me. It is very serious, very dangerous.
"I can never believe a political party that comes with knives and bars against us, that hurts people and puts them in hospital."
Golden Dawn says Greece should reject its bailout commitments and write off its debt.
"No one should fear me if they are a good Greek citizen. If they are traitors – I don't know," Michaloliakos said.
Flanked by two muscly aides, he later told a news conference: "Those who betray this country – it's time for them to be afraid. We are coming."
He did not elaborate, but added: "We will fight to free Greece from the global loan sharks, for a Greece of dignity and independence, and for a Greece that is not a social jungle with all these millions of illegal immigrants that were brought here."
It is time to be afraid of the rise of extreme nationalism across Europe, but I don't see Golden Dawn's strong showing as a sign that Greeks are increasingly becoming anti-immigrant and fascist. The results are a protest vote as most Greeks are fed up with corruption permeating the two main political parties and more pressing, they're fed up with savage austerity being imposed upon them to pay off bankers in Germany and around the world.
Importantly, a record 35% of voters didn't bother voting for any political party, which shows you the sorry state of Greek politics.
If you look closely at the results below, Greek voters have overwhelmingly punished the two major parties that endorsed draconian international loan agreements. Austerity loses as Greece's fringe parties gain seats. Ekathimerini comments that Greece was plunged into political uncertainty on Sunday as early polls produced a fragmented Parliament of at least seven parties and a result that could preclude New Democracy and PASOK forming a new coalition government (click on image):
What I find more worrisome than the rise of Golden Dawn is the rise of leftist parties, including the anti-bailout party Syriza and the communist party (KKE), which respectively garnered 16.8% and 8.5% of the votes. All these parties want to rewrite the rules of the bailout.
Over in France, less drama, but Francois Hollande, who defeated French President Nicolas Sarkozy to become the first Socialist in 17 years to control Europe’s second-biggest economy, pledged to push for less austerity and more growth in the region.
All this political uncertainty has some prominent hedge funds betting against the eurozone, and not just the peripheral countries:
Europe is a mess and I don't see policymakers doing anything to stem this crisis. The more they wait, the worse it gets, allowing these fringe parties with extreme views to grow stronger. This is the gravest danger of all in Europe and yet Merkel et al. still don't get it. Focus on growth, not austerity, or risk throwing Europe back into the Dark Ages.
Some of the world's most prominent hedge fund managers are betting against the eurozone -- and not just the peripheral countries everyone knows are in trouble. They're taking positions against the core countries, economies that -- until now -- everyone has assumed were rock-solid.
Here's a primer on the world of hedge funds and why the latest developments in the recently resurgent eurozone crisis are yet another warning shot across America's economic bow.
How the Other Percent Invests
Put simply, hedge funds are investment funds for the wealthy. You and I put our money into mutual funds, which a fund manager watches over, moving investor money into and out of a portfolio of stocks, bonds, and other investment vehicles as he or she sees fit in order to maximize the fund's return.
Hedge funds are private investment funds that are typically open only to a limited number of investors and require a large minimum investment to participate.
Hedge fund managers use a range of advanced investment strategies to maximize investor return, including leveraged, derivative, and long positions, as well as what are known as "short" positions. "Going short" means betting that a stock, security, or other investment vehicle is going to decrease in value, rather than go up. "Going long," or betting an investment will increase in value, is the much more commonly taken position.
Say It Ain't So, Angela
Most of us know the big names in the eurozone that have gotten into serious financial trouble over the last few years.
But Financial Times is reporting that a group of hedge fund managers are now shorting some of the core countries in the eurozone, including Germany and the Netherlands, even though bond yields in those countries -- the gauge for measuring a country's fiscal and financial health -- are still at record or near-record lows. In a nutshell, some of the world's best-paid, most-seasoned, and savviest investors are sufficiently convinced of the underlying sickness of even the most apparently stable eurozone countries that they're placing serious bets on their potential collapse.
- Ireland had to be rescued by other eurozone members when its debt-fueled property bubble collapsed, pushing the country to the verge of sovereign bankruptcy.
- Greece also had to be bailed out (twice) when it's sovereign-debt bubble burst, leaving it a hair's breadth away from default.
- Spain is most recently in the news, as its own debt-fueled property bubble and fiscal problems are sending the cost of its debt to near-unsustainable levels.
- Even France has been looked at suspiciously by the bond markets for a while.
John Paulson, the billionaire who made his name (and his money) by shorting the U.S. mortgage securities market in the run up to the 2008 financial meltdown, is one of the hedge fund managers reported to be shorting Germany.
Who Rescues the Rescuer?
The financial crisis, which began here in the U.S., may still be roiling across the Atlantic.
Europe is sick. The U.K. has just slipped back into recession. Spain has, too, along with recently suffering another downgrade on its sovereign debt by ratings agency Standard & Poor's, which sent its bond yields back above 6% -- the danger zone. While the U.S. unemployment rate is still above 8%, it appears to be coming down. And while GDP growth of 2.2% is nothing to write home about, the U.S. economy is growing.
But Europe and America are inextricably linked. To a great extent, as goes Europe, so goes the U.S. American banks still have an undetermined amount of exposure to eurozone banks. The potential economic debt-market shock waves produced by the default of any of the larger European countries could send the American economy back into recession.
This is why the thought of Germany's economy going south is truly terrifying. Germany is the eurozone's biggest economy and, along with France, has orchestrated and made the biggest contributions to the above-mentioned rescues.
But who comes to the rescue when the rescuer needs rescuing?
Finally, listen carefully to this Bloomberg radio interview with Yanis Varoufakis, professor of economics at the University of Athens, discussing the Greek economy and previewing Greece's elections. He states that Greece has become a "failed state" but going back to the drachma is only going to throw the country into a deeper depression.
Below, Al Jazeera's the Stream looks at the growing nationalist movement in Greece. Also, Stratfor analyst Kristen Cooper examines the results of the French, Greek and German elections and discusses the growing popularity of previously marginalized political parties.
And finally, Jacob Funk Kirkegaard, a research fellow at Peterson Institute for International Economics, talks with Yahoo's Aaron Task about the French and Greek election results, warning "the risk of Greece leaving the eurozone has certainly gone up."
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