Greek election critical for Euro zone
Jun 17, 2012 / 10:00 am
Greeks returned to the ballot box Sunday for an election that punched far above its weight, a vote that could propel Greece out of the eurozone and unleash an economic tsunami at home, in Europe and around the world.
As central banks stood ready to intervene in case of financial turmoil, Greece held its second national election in just six weeks to try to select a new government after an inconclusive ballot on May 6.
The two parties vying to win have starkly different views about what to do about the $300 billion in bailout loans that Greece has been given by international lenders.
One wants to tear up the deals and void the harsh austerity measures demanded by lenders that have caused Greek living standards to plummet. The other backs the bailout deal but wants to amend it.
The choice, the most critical in decades, could determine whether Greece abandons the joint euro currency used by 17 nations and returns to its old currency, the drachma. But there are no rules governing a country's exit from the eurozone, and a Greek exit could spark a panic that other debt-strapped European nations, Portugal, Ireland, Spain and Italy, might also have to leave.
That domino scenario, known in economic terms as contagion, could engulf the euro, causing a global financial panic not unlike the one that gripped the world in 2008 after the investment firm Lehman Brothers failed in the U.S.
The big question Sunday was how far deep Greek anger at the bailout terms would propel the radical left, anti-bailout Syriza party led by 37-year-old Alexis Tsipras.
The last opinion polls allowed before the election showed Syriza running neck-and-neck with the conservative New Democracy party led by Antonis Samaras. But no party is likely to win enough votes to form a government on its own, meaning a coalition will have to be formed to avoid yet another election.
"I'd like to see something change for the country in general, including regarding the bailout," said Vassilis Stergiou, a voter in Athens. "But at least for us to get organized and at the very least do something."
Inconclusive elections on May 6 resulted in no party winning enough votes to form a government, and coalition talks collapsed after 10 days. The vote, which also sent the formerly governing socialist PASOK party plunging to historic lows, sent a very clear message that Greeks have lost patience with the deep austerity imposed in return for the bailouts.
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