The Shockwave Effect of the Greek Election: the End of Austerity or the Beginning of the End of the Eurozone as We Know It?

Heinrich-Böll-Stiftung European Union
Place of publication
Brussels, Belgium
Date of Publication
March 2015
Number of Pages
4
Licence
All rights reserved.
Series

With one-third of Greeks at risk of poverty or social exclusion and more than a quarter of the population unemployed, the landslide victory of left-wing anti-austerity party SYRIZA in Greece’s recent national election is hardly surprising: What did surprise is SYRIZA’s choice for ANEL, the “Independent Greeks Party”, a small right-wing anti-austerity party with a dubious reputation, as coalition partner. The coming weeks will show what this all means and how Prime Minister Alexis Tsipras thinks to solve Greek’s pressing financial problems. His main election promise was to scrap the current financial deal with Greece’s creditors, restructure the Greek debt and roll back the harsh austerity measures imposed on his country. But how does he think to achieve these goals and on how much support can he count from European leaders (and peoples)? So far the reactions of EU leaders have been cautious. The current debt and reform deal with Greece, referred to as “financial water boarding” by Greece’s new finance minister Yanis Varoufakis, is widely seen as “unsustainable”. The flying visits from the President of the European Parliament Martin Schulz and Eurogroup President Jeroen Dijsselbloem seemed friendly but inconclusive. However, as was made clear by Commission-Vice President Jyrki Katainen and Dijsselbloem: Greece’s commitments haven`t changed and time is running out for Greece (by the end of February). Then again, on the meeting of EU foreign ministers on 29 January the new Greek foreign minister Kotzias did not oppose the extension of sanctions against Russia as was feared. So, how pragmatic will the new Greek government be and how much leeway can it expect from the rest of Europe? The SYRIZA victory could have wider implications for Europe. With two other southern member states holding elections in 2015, Portugal in October and Spain in December, like-minded anti-austerity parties of the left, such as Podemos in Spain, might get a boost from the result. So, at the end of the day, the question for all European citizens is: how will the Greek election result, the policy of the new Greek government and the EU’s way of dealing with it affect the elections in Portugal and Spain, the situation in the Eurozone and the European project as a whole?