Greece prepares to vote, eurozone worries

Stephen Beard Jan 23, 2015
HTML EMBED:
COPY

Greece prepares to vote, eurozone worries

Stephen Beard Jan 23, 2015
HTML EMBED:
COPY

Voters casting their ballots in this weekend’s general election in Greece know that much is at stake. A radical, far-left party called Syriza is leading in the polls. It’s promising to roll back the deep public spending cuts imposed by the outgoing government and renegotiate Greece’s $280 billion bailout deal. Such moves would have big repercussions for the European economy and the global economy, too.

Despite the high stakes, the campaign here has lacked razzmatazz and the mood is subdued. Conservative politician Adonis Georgiadis, however, doesn’t pull his punches when he talks about  the possibility of a Syriza victory. 

“If they win, we will be bankrupt within a month, maybe,” he says.

Georgadis, a former minister in  the outgoing government, warns that Syriza’s plans to unpick the carefully-negotiated deal on Greece’s bailout would lead to the country defaulting and being expelled from the eurozone:

“Unfortunately, it’s a big possibility and it will destroy us. Two months. I have totally no doubt about it.” he says.

But Syriza’s chief economist Yiannis Milios argues that austerity measures and crippling loan repayments are already destroying Greece. He says some 60 percent of young Greeks are without work and that has to change. He doesn’t believe recent reports saying the Germans would rather see Greece default and leave the euro than renegotiate the bailout.

“They’re bluffing” he says.

Former minister Adonis Georgiadis thinks Syriza is making a dangerous mistake. The Germans, he warns, never bluff.

Bluffing or not, Germany must respect the democratic will of the Greek people, says Syriza candidate and economist Yanis Varoufakis. He predicts that if  Greece is forced out of the eurozone, the currency union will ultimately fragment and collapse.

“When one third of the world economy that’s Europe implodes in this way as the result of the fragmentation of the Eurozone, we’re going to be facing a post-modern 1930’s,” he says.

Right now, the prospect of a euro collapse, let alone a 1930’s Depression, still seems remote. But the potentially massive repercussions of this weekend’s election in a small corner of Europe is one more risk for the world to worry about.

 

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.  

Need some Econ 101?

Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.