What does Greeces election result mean for the eurozone?

Last night, Greece's snap general election saw victory for the anti-austerity party, Syriza.

Led by Alexis Tsipras, the party's pledge to end the austerity measures currently in place won support from citizens, who are tired of the country's economic difficulties. In the third quarter of 2014, Greece returned to growth for the first time in six years, as its GDP climbed 1.7 per cent, but while the overall picture may appear positive, for locals struggling to make ends meet, times are still tough. Unemployment is at 25 per cent, rising to almost 50 per cent for those aged between 25 and 35.

"Hope is coming!" read the campaign slogan of Syriza, a cry that helped the party to win 36.34 per cent of the vote, displacing the incumbent New Democracy party, which received 27.81 per cent.

Syriza's share of the vote, though, was not enough for an outright majority, which has prompted it to team up with a right-wing party (Independent Greek) to form a coalition that is broadly anti-bailout. 

"Greece leaves behinds catastrophic austerity, it leaves behind fear and authoritarianism, it leaves behind five years of humiliation and anguish," Tsipras told supporters in Athens.

The victory confirmed fears among economic experts, who previously speculated that Greece could be heading towards an exit from the eurozone, a move that would possibly destabilise the area's already struggling economy. Nonetheless, Syriza says that it will remain in the euro, aiming to renegotiate the terms of its bailout with the European Central Bank, the International Monetary Fund and the European Commision (the "troika"). 

A member of Merkel's party told the German press that caution was required in any negotiations, reports Reuters: "We must not reward the breaching of agreements. That would send completely the wrong signal to other crisis-stricken countries that would then expect the same treatment."

Indeed, the result followed the ECB's surprise announcement that it will introduce quantitative easing until 2016 in an attempt to boost the eurozone economy. Further uncertainty could see the euro weaken further, with the single currency already falling to an 11-year low in the wake of the Syriza win.

Nonetheless, the weakening of the euro against the dollar and pound could be good news for eager US and British investors. TheMoveChannel.com reports that demand for European destinations climbed "significantly" in the second half of last year, as bargain hunters took advantage of favourable conditions.

Charles Purdy, CEO of SmartCurrencyExchange.com, told the overseas property portal that British buyers could emerge as the ultimate winners of the Greek election.

"In the last seven years, there has been over 20% depreciation of the euro, and by association, house prices in Europe. For example, in late 2008 when there was almost parity in the GBP/EUR (1.03965, December 2008) rate, a €300,000 property would have cost a British buyer £288,558. Today that same amount would cost a British buyer nearer £224,500 – a saving of almost £65,000," he told TheMoveChannel.com.

"Of course, nothing is certain in currency markets. The euro may well recover some of its strength in the coming weeks, should the Syriza party come to an agreement that keeps Greece in the euro or if the QE programme starts to boost the continent’s economy.”

He added that there has "not been a better time for Brits to purchase property in the Eurozone".

The outcome of the Greek elections is not yet clear. For British property buyers, though, hope is coming.

Photo: DIE LINKE. in Europa