While the pieces in the Greek post-electoral puzzle begin to fall into place after weeks of nail-biting suspense, a small window of opportunity seems to open again for Europe to devise and deploy a rational plan that will keep the European Monetary Union together.
In the Greek general election on Sunday, conservative New Democracy (ND) received 29.66 percent of the votes, which forces its leader Antonis Samaras to form a coalition government of unlikely partnerships in the coming days.
ND defeated anti-bailout candidate and “radical left” rising star Alexis Tsipras of the Syriza Party by less than 3 percent of the votes and former Finance Minister Evangelos Venizelos’ PASOK came in as a distant third with 12.2 percent of the votes. The extreme-right Golden Dawn Party secured its presence in the Greek parliament with 6.9 percent of the votes.
Europe must take next step
Despite the expected national political maneuvering that is likely to ensue, Greece’s fragile membership to the European project has been finally extended. Therefore, this election result should be understood as the Greek citizens’ last effort to deliver the democratically-backed “pro-euro” political leadership that Brussels and Berlin have so adamantly demanded over the past month.
It is clearly the turn for the European Union to take the next step forward.
Europe must now demonstrate stern and quick resolve to overcome the most pressing challenges facing the common currency today, namely, swift bank recapitalization across the board, revision of country-specific economic policies (including further debt restructuring), as well as credible moves that will lead to reform of the EU’s institutions and treaties for a more fiscally and politically coordinated union of equals in the not-so-distant horizon.
Essentially, Germany has to make a decision on whether it wants to tackle the euro-experiment’s founding faults once and for all, or let it break and move on its own. There really is no more time to buy.
Naturally, the other countries in the euro zone must play their part too. Spain, Italy and France may ultimately hold the key to make Germany decide one way or the other.
Greek window of opportunity
If, however, the condescending narrative of “take it or leave it” imposed by the core via its troika prevails, and Germany continues to piggyback on the EU’s clumsy and lethargic modus operandi, Greece’s efforts to stay in the euro system will be de facto dismissed.
Then, Europe must be ready to take full responsibility of a chaotic unraveling of the EMU and a rather dangerous political implosion in Greece, one that, given the current political layout, eerily resembles that of Germany’s Weimar Republic.
The Greek window of opportunity for European action is unlikely to remain open for long, as markets will be quick to decipher Europe’s real commitment to its future through decisive action vis-à-vis the application of new worthless patches.
The political situation in Greece may also turn unbearable rather quickly since Evangelos Venizelos has become the PASOK’s gravedigger, the economy continues to sink and a socialist-conservative coalition under troika pressure may ultimately lay the ground for Syriza to make its final assault to power – while the neo-Nazis watch the show from their comfortable new seats in parliament.
Greece has given Europe a chance for the euro’s survival, and it must be seized.
J. Luis Martín is director of trumanfactor.com, a Spanish web site that discusses economics and policy matters. Truman Factor translates and republishes selected Daily Capitalist articles for its Spanish-speaking readers.
“Greece gives Europe a chance” was originally published in El Confidencial.