Greece voted through its EU mandated reform agreements on Wednesday evening, opening a path for the country to be given a bridge loan that could save the state from bankruptcy. Though the vote passed with the vast majority of the parliament, much of the government, including outspoken ex-finance minister Yanis Varoufakis, voted against the bill.
With the support of his party lost, it seems that Alexis Tsirpas may be forced to leave office in the coming weeks and months. Bookmakers are betting that that’s going to happen. Paddy Power, an Irish bookmaker, has the odds firmly in favor of Mr. Tsirpas leaving office by the end of the year.
Betting on the future of Greece
On the question “Will Prime Minister Aexis Tsirpas be in office on December 31 2015?,” Paddy power has the odds at 2/5 for “No” and 7/4 for “Yes.” That means that the bookmaker thinks the Prime Minister will leave office and after the reform package vote that seems much more likely.
On whether there will be another Greek general election before the end of the year, the bookmaker is even more certain. Odds of another election come in at 1/25. That means that for every $25 you bet your return would only be $1. The firm is more optimistic about the future of the Euro than it is about the Mr. Tsirpas’ career as the head of his country.
On whether the Euro will exist by 2020, Paddy Power offers odds of 8/1 for yes and 9/2 for no. That’s not all that hopeful. The odds show an implied 11.111 percent chance of the Euro being around in contrast to a 9 percent chance of it going away.
Greece to get loan, and political turmoil
The vote on Wednesday triggered the discussions at the Eurogroup in order to give Greece a “bridge loan” that will shore up its finances until a third bailout for the country can be agreed. That loan was agreed just before 9 AM EST on Thursday.
Greece will receive 7bn euro loan in order to give the government the ability to get its state back together ahead of bailout talks. The ECB’s Mario Draghi said that the bridge loan opened up his ability to call for a raise on the Greek ELA cap. That means that Greek banks may be able to open after two weeks of closure and hurdles on taking out cash.
That means that Mr. Tsirpas has accomplished what he saw as the only path forward for his country given the situation he was in. For his party and his career it could mean a sever blow when the next general election is called.
Greece has a number of key votes ahead of it in the coming weeks and if Mr. Tsirpas’ party, and his ministers, don’t line up beside him he may be forced to call that election sooner rather than later.
Those who want to get some exposure to that, but don’t want to bet on the market’s reaction to it, can get a 40 percent return on their investment if they put down money with Paddy Power.