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Commentary

Greek Election Won't Lift Uncertainty

The range of outcomes for Greece and the eurozone will remain unusually large even after Sunday's elections.

Greek voters are off to the polls this weekend for the second time in as many months to choose a new parliament after May's inconclusive results. The lack of a functioning government in Greece has managed to ratchet up the uncertainty about the economic future of the country, and the results of the second round are unlikely to add much more clarity. The truth of the matter is that the situation in Greece, and the entire eurozone debt crisis, remains quite fluid, and trying to handicap what is going to happen with 100% certainty is virtually impossible. Investors need to be prepared for an unusually large range of outcomes.

The Greek political system doesn't lend itself to the relatively easy horse-race analysis of say a U.S. presidential election. In the U.S., you have two well-established parties with clear bases of support, a seemingly endless campaign, and enough polling to give you a fairly clear idea of a candidate's chances of winning. Once the election is over, the winner is clear (the elections of 1824 and 2000 notwithstanding), and they can start taking over the reins of power beginning in January the following year.