Greek coalition will start to fray in late 2018

Significance

The coalition government of left-wing Syriza and right-wing nationalist Independent Greeks (Anel) significantly lags behind the conservative opposition New Democracy (ND) party in opinion polls. The partners will seek to complete the bailout, then present themselves as seeing the programme through while limiting the pain of reforms imposed by foreign creditors. Elections need not be held before October 2019.

Impacts

• Tsipras is understood to be making quiet overtures to the Panhellenic Socialist Movement, but it is still in disarray.
• Greece’s escape from austerity depends on growth, which is expected to inch up from zero last year to around 2% this year.
• Another crucial indicator, unemployment, is projected to fall only gradually, from 21.7% now to below 20.0% next year.