21st Century Wire says…
Will this cause upheaval? No doubt. Could it go horribly wrong? Of course. Is it necessary? Absolutely.
In two days time Greece is due to go to the polls and Syriza, a party looking to say no to ridiculous and unmanageable debts, is set to take power. This has the potential to cause a huge shift in economic policy throughout the world as it identifies austerity as a failed policy route. But not everyone in the Euro thinks it is a bad idea for the Greeks to do this, Hollande had no issue here but subsequently had his nation fall victim to a terrorist attack.
This has the potential to cause huge changes in a world currently dominanted by Anglo-American financial hegemony….
Why Greece Needs Syriza To Win
European politics normally pauses for the Christmas break. But this time it erupted with a vengeance. On Dec. 29, Greek parliamentarians rejected the government’s candidate for president, triggering early elections scheduled for Jan. 25. Syriza, a radical-left coalition that wants to renegotiate the terms of Greece’s 205 billion euros’ worth of loans from eurozone governments, is leading in the polls.
Many fear that a showdown between eurozone authorities and a Syriza-led government bent on debt relief and ending austerity could revive the panic that almost destroyed the euro in 2012 and could even force Greece out of the 19-country currency union. The Athens stock exchange has plunged. Yields on Greek government bonds have soared. The cost of insuring against a Greek default has skyrocketed. But a Syriza victory on Jan. 25 may not be a calamity for Europe in the end. It may be a necessary step toward resolving a crisis that has been festering since 2009.
It’s not surprising that voters are angry with Prime Minister Antonis Samaras’s coalition government, which has implemented the brutal austerity demanded by the European Union and the IMF since Athens received its first bailout in 2010. Greeks have suffered six years of severe slump. The economy has shrunk by more than a quarter. Incomes have collapsed by nearly a third; many workers go unpaid. One in four Greeks — and one in two young people — is unemployed. The social safety net has been shredded. Many families scrape by on seniors’ slashed pensions. Crowds jostle for handouts at food banks. Some children are reduced to scavenging through rubbish bins for scraps. Hospitals run short of medicines. Malaria has even made a return.
Eurozone policymakers insist that Greeks have only themselves to blame for their plight and that the harsh treatment the policymakers imposed is working. But that isn’t true. Yes, successive Greek governments splurged before the crisis, doling out jobs and favors to their political patronage networks. With tax evasion rife, they borrowed abundantly: a whopping 15 percent of GDP in 2009 alone.
But Greece’s reckless borrowing was financed by equally reckless lenders. First in line were French and German banks that lent too much, too cheaply — foolishly treating the Greek government as if it were as creditworthy as Berlin and encouraged by Basel capital-adequacy rules and European Central Bank collateral-lending rules that treated sovereign bonds as risk-free…
Continue reading the full story at Foreign Policy
READ MORE ON GREECE AT: 21st Century Wire Greece Files
