Well, this is certainly going to be interesting…
Fox News reports:
Greece voted Sunday in an early general election that could alter the course of the country’s struggle with crippling debts, with a radical left party poised to win by promising to rewrite the terms of its international bailout.
The Syriza party led by Alexis Tsipras has remained firmly ahead of conservative Prime Minister Antonis Samaras’ New Democracy party in opinion polls throughout the election campaign, which was called two years ahead of schedule.
But those polls also have shown that a significant portion of voters remained undecided until the last minute, and suggest that Syriza might struggle to win enough parliamentary seats to form a government on its own.
[…]Syriza has promised to renegotiate the country’s 240 billion euro ($270 billion) international bailout deal. It has pledged to reverse many of the reforms that international creditors demanded in exchange for keeping Greece financially afloat since 2010.
The anti-bailout rhetoric has renewed doubts over Greece’s ability to emerge from its financial crisis that has seen a quarter of its economy wiped out, sent unemployment soaring and undermined the euro, the currency shared by 19 European countries.
Greece’s creditors insist the country must abide by previous commitments to continue receiving support, and investors and markets alike have been spooked by the anti-bailout rhetoric. Greece could face bankruptcy if a solution is not found, although speculation of a “Grexit” — Greece leaving the euro — and a potential collapse of the currency has been far less fraught than during the last general election in 2012.
Samaras’ campaign focused on the improving economy, which grew for the first time in six years in the third quarter of 2014. He has promised to reduce taxes if re-elected and has warned of the potentially dire consequences of reneging on bailout conditions. Opponents accused him of using fear tactics.
Syriza’s promises to end Greece’s era of crushing austerity have attracted many voters infuriated by the deterioration in their standard of living and ever-increasing tax bills.
[…]Greece’s next government faces a series of formidable tasks, the most pressing of which is concluding negotiations with bailout inspectors to release a 7.2 billion euro ($8.1 billion) loan installment originally due late last year.
I’m sure that the socialists will know how to run the economy, after all, they did such a good job last time there were in control.
The plan is for them to beg for debt forgiveness, ramp up government spending and raise the minimum wage.
The Wall Street Journal explains:
European economic orthodoxy, led by Germany, has fought Greece’s debt crisis with painful austerity—public-spending cuts and tax hikes—and other strict reforms. Syriza’s rise is the most potent challenge yet to that orthodoxy.
If Syriza wins, it could embolden left-wing parties in other countries, especially Spain, where political tensions also are boiling. It could even result in a rift with Germany that ruptures the euro.
The economic plan advanced by Mr. Lapavitsas and other professors aligned with Syriza is rooted in the core principles of debt forgiveness and higher government spending, which Germany has rejected.
[…]It has honed its focus since then, and Mr. Lapavitsas describes the party’s platform as “a Keynesian program with redistribution attached, with some Marxist view of the world.”
[…]In the tradition of John Maynard Keynes, Syriza advocates public spending to reignite economic growth. Greece can afford to spend more if some of its debt is forgiven by other countries.
Nikolaos Chountis, a Syriza candidate in Athens, ticks off the party’s spending priorities: food and electricity subsidies for impoverished households, a pension boost for the poorest retirees, a hike in the minimum wage and tax cuts for low earners.
[…]The party’s first message to Europe would be “let’s get rid of the [austerity agreement],” Mr. Stathakis says.
Let’s get rid of the austerity agreement? That’s the only reason why they are getting the bailouts now.
Look how cavalierly the socialists talk about going back on their agreement.
The prospect of an anti-bailout government coming to power in Greece has sent jitters through the financial world, reviving fears of a Greek bankruptcy that could reverberate across the eurozone.
“The verdict of the Greek people ends, beyond any doubt, the vicious circle of austerity in our country,” Tsipras told a crowd of rapturous flag-waving supporters.
He won on promises to demand debt forgiveness and renegotiate the terms of Greece’s 240 billion euro ($270 billion) bailout, which has kept the debt-ridden country afloat since mid-2010.
To qualify for the cash, Greece has had to impose deep and bitterly resented cuts in public spending, wages and pensions, along with public sector layoffs and repeated tax increases.
Its progress in reforms is reviewed by inspectors from the International Monetary Fund, European Commission and European Central Bank, collectively known as the troika, before each installment of bailout funds can be released.
Tsipras pronounced the troika and its regular debt inspections “a thing of the past.”
Now if you break the deal, you would think that the bailing out would stop. And then the Greek people will understand what it means to elect the same socialists that ruined their economy when they won in 2009. I am not entirely sure that these people have any plan for economic growth, other than “you give me bailouts, I don’t pay you back”. They needed leftist professors to come up with that one. They certainly couldn’t find any economists in the private sector who would believe such nonsense.
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