From time to time, I like to take a look at upcoming elections in our allies.  As the recent market fluctuations in response to problem with the Chinese economy show, the U.S. is not immune to feeling the effects of problems in the rest of the word.  Between now and November, there will be elections in Greece, Canada, Portugal, and Turkey.  For now, I want to focus on Greece, Canada, and Turkey.

Greece will hold its second election of 2015 next Sunday, September 20.  This election was almost inevitable after the results of the January election.  The Greek economy has been on shaky ground since the 2008 global recession, and Greece has needed multiple bailouts from its economic partners to avoid defaulting on its loans.  In January 2015, the Greeks voted for a new party (Syrizia) that opposed the concessions made in past bailout deals and promised to be a tough negotiator in the next round.  The problem was that Greece needed a new bailout more than its partners needed to keep Greece afloat.  So the government eventually had to accept a worse deal than its supporters wanted.  Several members of the governing party voted against the deal, costing the government its majority and leading to this second election.

Greece uses a proportional representation system to elect 250 members of parliament.  To reduce the likelihood (endemic to proportional representative systems) of an inconclusive result in which tiny parties hold the balance of power, Greece gives the party that finishes first an additional 50 seats.  As a result, it only takes around 35-40% of the vote  rather than 48-50% to get a majority of the seats.  The question for next week’s election is whether Syrizia will keep their supporters (with voters recognizing the limitations that the Greek government faces) or whether Greek voters will look for some other party promising the impossible. Continue Reading...