The economic uncertainty caused in Greece by the election victory of anti-austerity party Syriza could benefit EU exporters by weighing down on the euro.

As Greece’s new Prime Minister Alexis Tsipras promised not to disappoint anti-austerity voters and renegotiate the country’s €240bn bailout, Greek bank shares plummeted this week: Piraeus saw a 29% drop, National Bank of Greece 28%, while Alpha Bank and Eurobank shares went down 22% each.

“IHS’s assessment is that given Syriza’s choice of Anel as a coalition partner – which promotes strong anti-bailout and anti-austerity views – the negotiations are highly unlikely to be smooth. Debt relief is likely to be high on the agenda, despite the lenders’ apparent reluctance to discuss this issue,” says IHS senior analyst Blanka Kolenikova.

Though the new government quickly started delivering on its campaign promises by conducting a privatisation review, measures are unlikely to be definite until negotiations with creditors start.

The lenders are unlikely to accept many of Syriza’s proposals.

“The lenders are unlikely to accept many of Syriza’s proposals, such as the reduction in the projected primary (that is, excluding interest payments) surpluses, the termination of the privatisation programme, or a cut in the nominal value of the loans given to Greece. Were Greece to obtain significant debt relief, this would surely lead to calls from countries such as Ireland and Portugal for the same treatment,” Kolenikova adds.

The uncertainty has led to deposit outflows, and Greek banks already increased their support from the European Central Bank (ECB) last December – support they might lose if the country fails to reach a bailout agreement.

But while analysts predict a looming liquidity crisis in the country, contagion to the rest of the eurozone is unlikely – foreign banks’ exposure to the Greek economy has reduced significantly since the crisis, and financial firewalls have been put in place exactly for that purpose.

In fact, European exporters could even benefit from Greece’s economic uncertainty, as the euro dropped to an 11-year low on the back of the election (around US$1.12), later stabilising at around US$1.13.

IHS senior economist for Europe Diego Iscaro tells GTR: “We expect the uncertainty to have an impact on domestic demand at least in the first quarter. As long as this uncertainty remains, it’s likely that Greek demand for external goods and services will remain low until the situation becomes clearer.

“The uncertainty may weigh down on the euro, and a weaker euro would be positive for exporters in the eurozone. That positive impact may actually be stronger than the negative impact coming from lower demand from Greece, as EU countries don’t export a lot to Greece.”