Greece will leave the euro — now look to Spain
The Greek poll on Sunday has been overshadowed by the French Socialists’ triumph but has the same message, and is crucial to the future — or lack of it — of the euro. Ruling politicians of whatever country are finding it harder and harder to retain office while promoting anti-austerity measures. In Greece the crisis has been longer and the reaction more extreme. Centre-Left party Pasok and Centre-Right New Democracy, which for the past 30 years have presided over corruption and the debt bubble, polled abysmally, with New Democracy, the largest party, receiving just 19 per cent of ballots. Utopian Marxist-Green grouping Syriza has stormed ahead with almost a fifth of the vote, destroying two generations of Pasok supremacy in the countryside, as Greece’s numerous small farmers struggle under the burden of EU-imposed taxes and soaring fertiliser and diesel prices. The Marxist-Leninists of the KKE have edged forward to 26 seats. Ominously, neo-Nazis in the Golden Dawn party have entered Parliament, with 21 seats. Their political roots lie in the seven-year military dictatorship of a group of colonels which ended in 1974. The international financiers who control the Greek economy will hope to see a quick (and stable) coalition formed, but it will be difficult for many MPs to even sit in the same room. The New Democrats, led by Peloponnese nationalist Antonio Samaras, had first sip from the poisoned chalice of governing Greece, but have failed to achieve anything. Virtually all other possible partners ruled out coalition with Samaras. He tempted Syriza but they regarded this as a sell-out. Syriza now has its own chance to form a coalition, but without KKE participation the numbers do not add up. In any case, Syriza can bide its time, hoping to become the largest party in a future poll. There are 30 or more other votes up for grabs but all of them belong to people who are strong opponents of current EU policies. As WB Yeats wrote, “the centre cannot hold...” or at least it will be difficult. The likely script of the next few weeks is a motley coalition cobbled together but then voted down on rejection of IMF and EU policies. New elections will follow. There is even a projected date, June 17. International observers will dislike this but the alternative is politics moving back onto the streets where violent extremism would flourish. Will there be spillover to the rest of similarly debt-challenged southern Europe? Not immediately, perhaps. Greece has exceptionally ideological politics and major issues dating back to the Second World War. Italy and Portugal have more scope to adjust. But Spain is the Titanic heading for the iceberg. Thousands of British expats currently trying to sell their apartments at fire-sale prices and return home speaks volumes about prospects there. And the view from Downing Street? It may not be long before a decision has to be taken on whether Britain should support a Greek exit from the euro or contribute money we can’t afford into a vast new bailout fund for Spain. Unpleasant dilemmas are approaching for us, too.
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