Remember the old saying about the definition of insanity being repeating a set of actions exactly as before and expecting a different outcome. The Greek nation is about to illustrate that principle by having another election for its Parliament after having just concluded an election several days ago. Why? Well why not.
It seems in the just completed election in
voters splintered the outcome, so that no party and even no coalition of
parties can form a government. So right
now there is no government.
The most likely situation now is for the president, Mr. Papoulias, to appoint an interim government and call new elections in 30 days. That would lead to more instability, since
has a number of crucial deadlines in the coming weeks. Greece
The problem is that the two major parties agreed to very onerous austerity policies in return for a bailout from the European community and the IMF. These policies resulted in an increase in taxes for some, but the major impact was a huge cut in government spending and the creation of a vast amount of unemployment. And to get the next round of help
Greece has agreed to even more cuts
and higher unemployment.
In what is a surprise only to the politicians and policy makers who think
Greece must be
destroyed in order to save the country, voters have overwhelmingly rejected the
policy, and have turned against the two main political parties. Europe has
tried to bully the Greeks, but really, who expects that to be effective.
“Greece must know that there is no alternative to agreed reforms if it wants to stay in the euro zone,” Jörg Asmussen, a member of the executive board of the European Central Bank, said Tuesday.
But as Sunday’s elections made clear, Greek voters have grown weary of such statements, which many believe are empty threats, and flocked to Syriza, which received nearly 17 percent of the vote by trying to carve out a space that is opposed to the loan agreement but in favor of
staying with the euro.
Syriza came in second to New Democracy’s 19 percent and ahead of the
Socialists’ 13 percent, both parties’ worst showing since their founding in
the doorstep of a major crisis. Greece
fails to enforce the benchmark cuts and structural changes set in a second loan
agreement reached in February, its lenders will withhold the next installment
of aid it expects in May. Without that, it cannot pay a bond that comes due on
May 17 or meet expenses past July. Greece
will have to either blink, or allow a major default of Greek debt and a
shutdown of the Greek government for lack of funds. Since Greek debt is owned by a large number
of financial institutions outside of Greece,
such an outcome would devastate Europe’s
already weak economy.
So look for
Europe to find
a face saving way out. As for the
Greeks, exactly why anyone would expect the next election to have a different
outcome than the last one is unknown. In
fact, in another election it is very reasonable to expect that the
anti-austerity forces will gain even greater support. Okay Europe,
what do you do then?