Greece is done.
The anti-austerity folks have voted, and it ain’t pretty. The big winner of the day was the leftist anti-bailout coalition, Syriza. In the last election in 2009, it scored just 4.6%. This time it took second place with almost 17%, beating Pasok whose support base all but collapsed. This nation, punished by two years of the most drastic austerity measures in modern history, has hit out against the bailout, the political mainstream and the painful cuts that have brought Greece to its knees.
A majority has spoken and the message is clear: Rip up the “memorandum” (the bailout agreement with the IMF and the EU) read, Germany, and get rid of all immigrants. The radicals and the neo-Nazis now have the country.
So, in the next three days, the various parties have to form a new government or put on new elections and do it all over again. If anyone doesn’t see that this is a government falling into fascism without hope of civilized central discourse, then they are in denial.
And without a government in place, the next installment of Greece’s international bailout money would probably be put on hold, raising the specter of the country’s bankruptcy within weeks.
In reality, any future government here will have to – at the very least – renegotiate parts of the bailout, following the will of the majority. But the challenge will be to do so, while still ensuring Greece’s membership of the euro – something a large majority of Greeks want, according to opinion polls. That doesn’t seem possible. The opinion polls have been like this for years now, signaling a complete inability to grasp the reality of the situation. Greece needs to abide by the austerity measures of the bailout, or the Germans will withdraw and Greece will have no choice but to default and drop out of the Eurozone.
The fervor among Greeks to throw out any additional austerity measures is being fanned by the election of France’s new Socialist President, Francois Hollande. He is openly skeptical of austerity, favoring pro-growth policies instead – the winds of change may be blowing from Paris to Athens – and may further embolden those fighting the cuts there.
Greece is where the Eurozone debt crisis began back in 2009. It remains where the problems are most acute. And now this country has been plunged into yet another period of intense instability that it – and Europe – can ill afford.
There really is no way out and the sooner Greece accepts the inevitable and cuts their losses, the better off they and the rest of Europe will be.