Voters in Greece have elected a radical left party, Syriza, into power on Sunday raising fears across Europe that the country may exit the Eurozone and default on its debt. Following four years of an economic crisis that hit Greeks severely, Prime Minister elect Alex Tsipras gained support by promising to end the national campaign of austerity believed by many locals to have harmed middle and working class families. With an economy that is only partially recovered, the political implications of the rise of Syriza are global.
“You are an example of history which is changing, your mandate is undoubtedly cancelling the bailouts of austerity and destruction,” Prime Minister Tsipras told crowds at a victory rally on Sunday night in Athens.
Greece has been struggling to regain its economic footing ever since they entered the Eurozone in 2001. Signs of an economic crisis were not far off then but the economy hit a wall in 2011, leading to the first installment of a 110 billion euro bailout designed to help Greece survive. However, a second bailout was approved on March 14th, 2012 which totaled 28 billion Euros ($37 billion).
“The verdict of the Greek people ends, beyond any doubt the vicious circle of austerity in our country,” the Prime Minister went onto say.
The Greek economy has been unable to come out of an economic funk which many people have described as a depression not far off from the height of the one Greece suffered in the 1930s. The country’s current debt to GDP ratio is listed at 173.64% and their external debt to GDP ratio, which is used to measure the amount of debt that Greece owes its foreign creditors, is listed at 211.87% in real time.
One of the many problems to have arisen throughout this period is a healthcare crisis that is affecting many Greeks who have not have had a job for several years and consequently have lost their health insurance coverage. “People don’t have the money to go to doctors. If they have a toothache they get terrified, because how the hell are they going to pay for a visit to the dentist?” election volunteer Panaghiota Martidou said.
“A part of that is Greece holding to its prior commitments and that the new government be tied in to the reform’s achievement,” German Government spokesman Steffan Seibart said regarding Tsipras’s threats to exit the Eurozone and to back away from prior reform agreements made. Germany is particularly concerned about any debt default because it is one of the primary holders of Greek debt.
Tsipras’ party, Syriza, won 149 seats out of a 300 seat parliament which leaves the party two seats from gaining an absolute majority. The New Democracy party came in second with 76 seats and the Golden Dawn Party came in third with 6.3% of the vote.
“I’m handing over a country that’s a part of the EU and the Euro. For the good of this land, I hope that the new government will respect these achievements,” outgoing Prime Minister Antois Samaras said in a concession speak on Sunday.
A majority of the agreements made in the previous bailouts demanded that the Greek government severely cut spending and remain committed to structural reforms. “We can talk modalities, we can talk debt restructuring, but the cornerstone that Greece must respect the rules of the monetary union – that must stay as it is,” Belgium Prime Minister Johan Van Overtveldt said regarding the Greek elections. He continued by saying, “If Greece is unable to honor its obligation this year, then economic, financial and banking stress is likely to lead to an agreement or to a second round of election, or to an EMU exit”.
Ultimately, the new Greek government will be looked at as a source of inspiration and hope by the Greek people and as a source of anxiety and fear by others in the in the EU. It seems the future is quite uncertain as to where Greece is headed and whether or not they will stay within the EU and honor its debt obligations.
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