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Danske Bank analysts note that the general elections in Greece yesterday showed overwhelming support for the centreright party New Democracy led by Kyriakos Mitsotakis, who is set to become the new prime minister.

Key Quotes

“Preliminary results show that New Democracy got 40% of the votes, while Alexis Tsipras’ ruling Syriza party is set to get 32%. The result also showed waning support for right wing Golden Dawn, which is (so far) not set to pass the 3% threshold needed to enter parliament. Golden Dawn became the third largest party in Greece’s last elections obtaining 7% of the vote.”

“The Greek election system sees the largest party obtaining a further 50 mandates, which would give New Democracy an absolute majority. Although Mr. Mitsotakis has promised tax cuts and larger investments, the economic policy will most likely not differ much from the existing one, given the deal agreed upon between Tsipras and the country’s creditors.”

“Greece’s government debt has performed immensely this year – the current 10Y government bond was introduced at a yield of 4% in early March and is now trading at 2.1%.”