Syriza, a Greek left-wing party, scored a landslide victory in last Sunday’s election in Greece but came just short of obtaining a parliamentary majority. In the final count, Syriza led New Democracy, the outgoing centre-right party, by 36.3 per cent to 27.8 per cent of the votes and controls 149 seats in the 300-member house.

Alexis Tsipras, Syriza’s leader, has pledged to keep Greece in the eurozone but promised that his government would negotiate a debt restructuring with international lenders with the aim of alleviating the austerity measures his country had to endure after flirting with bankruptcy.

Syriza took on the Independent Greeks party as a coalition partner, a centre-right party that shares Syriza’s antipathy for austerity. Prime Minister Tsipras now faces tough negotiations with his country’s European creditors, led by Germany, who are adamantly against forgiving Greece’s debt.

Later in the week, consumer prices in Germany were reported to have declined in January, as the standard EU gauge of inflation, the harmonised index of consumer prices (HICP), fell 0.5 per cent on an annual basis, following a modest 0.1 per cent gain in December. Economists had forecast a 0.2 per cent decline.

This was the first drop in consumer prices in Germany in nearly five-and-a-half years and is consistent with forecasts for deflation in the eurozone.

Month-on-month, the HICP tumbled 1.3 per cent in January after a 0.1 per cent gain the previous month. Economists had forecast a one per cent drop.

Finally, UK house prices continued to increase at a faster pace in December, data published by the Land Registry showed last week. House prices rose 0.6 per cent month-on-month after increasing by 0.1 per cent in November. On a yearly basis, house prices rose by seven per cent in December, slightly slower than the 7.2 per cent rise seen in the previous month.

Average house prices in England and Wales reached £177,766 (€237,276) in December compared to a peak of £181,383 (€242,104) seen before their collapse during the financial crisis.

This article was compiled by Bank of Valletta plc for general information purposes only.

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