Stratfor: Greece will face social unrest in 2016

The Greek economy has another year of negligible growth and extremely high unemployment ahead of it. This will lead to repeated protests and frequent conflicts within the government, which in turn will force the administration to slow the process of reform.

A collapse of the Greek government cannot be ruled out because Tsipras leads only a very small parliamentary majority. However, the Greek establishment wants to avoid early elections, so even if the government fell, it would be replaced by a technocratic or coalition government that would still be able to approve legislation.

In 2016, Greece’s main threat will be social unrest, not debt repayments. A repeat of the 2015 crisis seems unlikely because Greece does not face a particularly pressing calendar of debt maturities. This means that the risk of a Greek default or exit from the eurozone is lower than in 2015. But Germany’s tenacity and Greece’s resistance will make every bailout review tense, and negotiations over potential debt relief will probably be delayed until late 2016. We do not expect Greece to exit the eurozone in 2016, but Greece’s problems are far from resolved. Increasing resistance to reforms, initially among the public but then in the political sphere as well, set the country up for another inevitable confrontation with its creditors down the line.