Greek Gambit

With Syriza winning Greek elections yesterday, expect increased market volatility. Syriza wants to end austerity and renegotiate its €240 billion bailout, which Germany firmly opposes. To scare Greece, Merkel suggests that Greece leaving the euro would be OK, but it’s not. To avoid that, compromise will be required. Regrettably Syriza’s leaders are inexperienced and Greece will default in March absent more bailout money. The impending political brinkmanship could spell disaster.