A perfect storm is brewing in Greece

By Lane Carter

It’s not easy to be king. But being a kingmaker can be just as tough, if not worse.

Just ask anyone from the Liberal Democrat Party in the UK, or indeed, Germany’s Free Democratic Party.

Barring surprises, the lifespan of a king-maker usually mirrors that of emperor (or empress) he or she helped crown. But the same cannot be said of his or her influence.

Greek capital flight

Capital has been leaving Greece ahead of the election. Source: RBS research.

Kingmakers are most powerful before the new leader takes his or her seat at the throne. From there, the role usually involves a deep dive into oblivion, occasionally accompanied by the muffled sound of implosion.

But that hasn’t stopped politicians in Greece from trying.

No surprise there, since the party that comes in third in the January 25 election will get to influence the shape and policies of the next Greek government, which would in turn dictate the country’s future in Europe.

Undeniably, the stakes are high. But the quality of the contenders, it has been whispered, leaves a lot to be desired.

Some — such as the Independent Greeks –cruise on a populist ticket promising changes they have yet to work out how to deliver, while others – and here Mr. Venizelos and Mr. Papandreou come to mind — coast on past glories in the hope that familiarity will not breed contempt.

Both groups share a “campaign now, policy later” mentality, which is as naïve as it dangerous. The potential for policy error is significant. The risks of contagion are huge.

What Greece needs is a credible and pragmatic kingmaker, with the ability to bring rivals to the negotiating table and put the country’s future at the heart of decision-making.

This is particularly crucial at a time when the deep sense of uncertainty in the political and financial arena is matched by an apparent complacency among policymakers across the continent.

In other words, a perfect storm is brewing.