GREEK ELECTIONS: Concerns remain despite promise of relief for Turkish steel
Greece’s election results may have brought some relief to neighbouring Turkey’s steel export market for now, but short-term stability is unlikely to solve to problems faced by Turkish mills.
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“It’s a relief, sure, because this atmosphere of uncertainty doesn’t do any good to the market,” one producer in Turkey told Metal Bulletin.
Greece’s centre-right New Democracy party, which holds pro-bailout and pro-austerity positions, won 29.7% of the vote in Greece’s second legislative elections, which took place on June 17.
As the New Democracy party did not win a clear majority, only edging slightly ahead of anti-austerity party Syriza’s 26.9% of the vote, a coalition government will now have to be formed.
Uncertainty over Greece’s future in the eurozone and the potential effects that it could have on the global economy created uncertainty that has pushed down export prices from Turkish mills.
Continental Europe and the Mediterranean basin are the traditional target markets for Turkey’s steel exports.
Other observers were very cautious about the election result and the long-term outlook, however.
“There will be a certain amount of relief that what some people would see as the worst outcome has been avoided and you are not going to get confrontation between a Syriza-led government and the eurozone,” former UK chancellor of the exchequer, Norman Lamont told Sky News.
“In reality, nothing underneath has changed very much. Very few people believe Greece is in a tenable position for the long-term, but at least an immediate very bad crisis has probably been put off,” he added.
Lamont served as chancellor under former prime minister John Major’s government from 1990 to 1993.
Other players in Turkey’s steel market echoed Lamont’s views.
“I’ve yet to come across anybody who thinks that this is going to get better,” one industry observer said.