1. POSSIBLE GREEK ELECTION OUTCOMES A NIGHTMARE FOR POLLSTERS S.TRAVLOS-4 th of JANUARY 2015

2. A TIGHT TIME SCHEDULE NATIONAL ELECTIONS 25/01/15 MANDATE TO FORM GOVERNMENT TO FIRST PARTY 26/01/15 MANDATE TO FORM A GOVERNMENT TO SECOND PARTY 29/1/15 MANDATE TO FORM GOVERNMENT TO THIRD PARTY 1/02/15 FIRST ROUND TO ELECT PRESIDENT 6/02/15 SECOND ROUND TO ELECT PRESIDENT 12/02/15 THIRD ROUND TO ELECT PRESIDENT 18/02/15 1/4/15S. TRAVLOS 2

3. TWO CONCURRENT PROCESSES  If the first party manages to get 151 seats it will automatically get the mandate to form a government and within 2/3 days a new government will be announced.  If the first party fails to get an outright majority it will still get the mandate but if it is unable to form a coalition government it will return the mandate. The second party will get the mandate and explore the possibility of forming a coalition government. If it fails the mandate goes to the third party. Then if the third party fails to form a government new national elections are called under a caretaker government. The President of the Republic may also, as a last resort effort, convene a meeting of all part leaders and try to explore the possibility of a coalition government.  It goes without saying that if the first party (which is going to get a 50 seats bonus) fails to form a government it will be almost impossible for the second and third to succeed with the expected balance of power in the new parliament.  Meanwhile the Parliament has to go through three rounds of electing a new President. With the expected balance of power a new President will be elected in the second round with at least 151 MPs voting for him. As soon as this process is concluded Parliament is dissolved and elections are held.  The timing of the new elections depends on the conclusion of the election process of the President. 1/4/15S. TRAVLOS 3

4. COMPLEX CALCULATIONS FOR OUTRIGHT MAJORITY OUTCOMES1234567891011121314 Total percentage of parties not gaining 3% 3%4%5%6%7%8%9%10%11%12%13%14%15%16% Required percentage of popular vote for the first party to have majority 39,2%38,8%38,4%38,0%37,6%37,2%36,8%36,4%36%35,6%35,2%34,8%34,4%34% Interval of most likely outcomes 1/4/15S. TRAVLOS 4

5. CALCULATIONS EXPLAINED  Whether a party gains an outright majority depends on the votes going to small parties that do not manage to reach the 3% threshold required for representation. The largest the percentage going to these parties the lower the threshold for the first party to get a majority.  The experience of previous elections indicates that this number changes depending on the mood of the electorate. In the first elections of 2012 in May the total percentage going to the small parties was 19%. However, in the second polarised elections of June 2012 that number nosedived to 6% requiring a 38% vote for the first party to gain 151 seats.  In the previous table the outcomes 5 to 9 seem to be the most probable in the forthcoming elections. 1/4/15S. TRAVLOS 5

6. COMPLICATIONS  With so many undecided voters and a fragmentation of the political system it is difficult to predict not only the gap between the first and the second but also the number of parties that will manage to exceed the 3% threshold.  Latest polls indicate a diminishing gap between SYRIZA and ND, at least another 4 parties (POTAMI, PASOK, GOLDEN DAWN, COMMUNIST PARTY) entering parliament and one other party (INDEPENDENT GREEKS) very close to the 3% threshold.  More complications arise from the creation of the new party led by Mr. G. Papandreou. The new party will undermine PASOK and possibly win back some voters from SYRIZA. It will take at least a week to determine the possible impact of the new party. 1/4/15S. TRAVLOS 6

7. LONGER TERM TENDENCIES 1/4/15S. TRAVLOS 7

8. LIKELY OUTCOMES POSSIBLE OUTCOMESPROBABILITYIMPACT ON NEGOTIATIONS SYRIZA MAJORITY 20% Negotiations with creditors will be difficult as SYRIZA has turned to a more radical rhetoric in order to attract voters in the run up to elections. They believe that the Europeans will be forced to change their position and reach a compromise by June 2015. The ECB will stop refinancing banks after the end of the extension of the current MOU at the end of February 2015. SYRIZA COALITION A (with POTAMI or PASOK) 30% SYRIZA will be held back to a more moderate policy stand as possible partners are pro European but still negotiations will be difficult and lengthy with uncertain outcome. The internal left opposition will be opposing any compromise. SYRIZA COALITION B (with IND GREEKS) 10% Negotiations with creditors will be difficult as SYRIZA will be supported by a very anti MOU party with an unpredictable leader. ND COALITION 25% ND will face creditors from a position of strength if reelected and negotiations with creditors will be tough but manageable. The junior coalition partners may add complications to the negotiations. NO GOVERNMENT 15% The possibility of not forming a government is small but not negligible because junior partners will be difficult to accept terms by the senior parties. An early collapse of government is also a high possibility during discussions with creditors over diverging positions on crucial issues. 1/4/15S. TRAVLOS 8

9. CONCLUSIONS  The most likely outcome at this point is the formation of a coalition government led by SYRIZA. The coalition will be unstable for a number of reasons mainly related to the internal contradictions of the party and the divergence of opinions with possible junior partners.  Negotiations with creditors will be difficult although the basis of a compromise can be found involving on the Greek side continuation of reforms and sound public finances and on the creditors side a generous rescheduling of debt maturities.  The possibility of ND coming first in the forthcoming elections is not negligible but it will require considerable effort and compounding mistakes by SYRIZA to turn the tide. 1/4/15S. TRAVLOS 9