On Sunday, Greeks will go to the polls to vote for a new government, following an earlier vote in May that failed to deliver a majority for any party. The radical-left SYRIZA party (which has been campaigning on a promise to scrap the country’s EU/IMF bail-out, but which is in favour of Greece remaining inside the euro) is currently neck-and-neck with the centre-right New Democracy party (which supports the bail-out in principle, but would like to see elements of it renegotiated). The think-tank Bruegel offers some analysis of the three most likely outcomes:
- No party wins. The vote proves inconclusive and no party is able to form a government, which “would likely lead to political chaos and make the Greek exit from the euro a real possibility”.
- New Democracy wins. This may lead to a modest renegotiation of the bail-out terms (this Financial Times article seems to support this possibility, with claims that European officials are planning a package of “incentives” to encourage Greece to support the bail-out)
- SYRIZA wins. Bruegel calls this outcome a “dark horse”, arguing that a SYRIZA government will likely have to break one of its main campaign promises: either it will have to accept the Greek bail-out or it will have to accept that Greece cannot stay in the euro.
Recently, we had the chance to talk to Nichi Vendola, President of the Apulia region in Italy and leader of the Left Ecology Freedom party. We asked him about the possibility of a Greek bail-out, and put some of your comments and questions to him. We started with a comment from Michael from Greece, who argued that his country “has a few alternatives, but it can only choose one and that is to stay in the eurozone and the euro.”
Mr. Vendola responded by saying that Greek voters should not be intimidated:
I think Greece has an alternative: that is to raise its voice and keep on demanding a radical change in the crazy policies that Mrs Merkel, and the worst ruling class Europe has ever had, are imposing on the Greek people and on all European people.
He also set out some of the steps he believed policy-makers needed to take in order to finally bring the eurozone crisis to an end:
Europe needs to get a bullet-proof vest; it cannot find itself undefended in front of the international speculators’ firing squads. We need more courage. We need Eurobonds. We need the European Central Bank as a lender of last resort.
A clear split seems to be developing in European politics between those who favour expansionary “growth” based fiscal policies, and those that believe in restoring market confidence through an emphasis on “austerity” and budgetary prudence. Nichi Vendola is firmly in the “growth” camp, but with the economy in crisis has he forgotten his credentials as a green politician? Our next comment came from Peter, who argued:
Our economy is geared to achieving growth and, in times of recession, the economic policy is all about returning to growth. The financial crisis is an opportunity for some basic rethinking about what the economy is for, and how, through some fundamental restructuring of our financial system, we can safeguard our economic stability in the future, as well as achieving wider social and environmental benefits.
What do YOU think? Would a vote for the radical-left SYRIZA party force Greece out of the euro? Or would it send a clear message to Merkel and other European leaders that austerity is not working? Do you think Greece should reject the bail-out deal? Let us know your thoughts and comments in the form below, and we’ll take them to policy-makers and experts for their reactions.