Greece will vote in
parliamentary elections on Sunday, nearly one month after Prime Minister
Antonis Samaras was forced to call a snap vote after parliament failed to agree
on a new president.
Samaras' popularity
has declined significantly since coming into office in 2012, amid a strict
austerity program imposed by Greece's "troika" creditors, made up of
eurozone countries, the European Central Bank and the International Monetary
Fund.
Greece received
bailouts from the "troika" in 2010 and 2012 totaling 240 billion
euros (or $283 billion), and continued funding is set for review again in
February.
Despite recent
economic gains, unemployment remains as high as 26 percent and the economy is
still struggling, the Economist reports.
Tsipras has campaigned
furiously against the austerity measures and vowed to renegotiate the country's
huge debt burden. But countries who funded the bailouts, most notably Germany,
have refused to negotiate debt relief. The potential standoff raises the
prospect that Greece will default on its debt and leave the euro currency,
causing economic and political reverberations around the world.
HISTORIC MOMENT FOR THE EURO
Analysts say that
despite their threatening rhetoric, both Greece and Germany have more interest
in striking a deal than a Greek default.
Tsipras moderated his
talk about facing down Europe as the election got closer, the Guardian
explained. The newspaper noted that Tsipras, if victorious, has a delicate
balancing act ahead between the demands of Greece's creditors and his anti-euro
political base.
Both Tsipras and
German Chancellor Angela Merkel insist that Greece should stay in the eurozone.
If Greece does leave, it would be the first departure in the currency's
history.
Such a move would not
necessarily prompt other European countries to follow. "Investors seem to
be betting that the people of Italy, Spain and France will peek at the chaos in
Athens, shudder -- and stick to the austerity that Germany’s Angela Merkel has
prescribed for them," The Economist wrote.
Yet it would be a huge
step into the unknown for the young currency union, particularly among weaker
eurozone economies with political troubles of their own, such as Italy and
Spain.
DESTABILIZED GLOBAL ECONOMY
Since the 2008
financial crisis, concerns that Greece will default on its debt -- the highest
in Europe relative to gross domestic product -- have repeatedly flared.
Economists warn that a Greek default would undermine confidence that other
debt-ridden countries will meet their obligations, sending financial markets
into further crisis.
However, as Bloomberg
noted, some of the direst predictions were averted by European Central Bank
guarantees, and Europe is less panic-stricken today about Greece's potential to
destabilize the global economy.
But unpredictability
is not good for financial stability. The Wall Street Journal reports that
Greece's economy is already suffering from political uncertainty surrounding
the elections.
EMBOLDENED RADICAL POPULIST PARTIES
Populist parties of
both the left and right are surging across Europe, and could be boosted by a
Syriza win.
"With similar
anti-establishment parties gaining ground rapidly in a number of other
countries scheduled to hold elections in 2015, the spill-over effects from a
further period of Greek turmoil could be significant," The Economist
Intelligence Unit warned in research for the BBC. "Anti-establishment
sentiment has surged across the eurozone (and the larger EU) and the risk of political
disruption and potential crises is high."
Anti-establishment
parties have even rallied together despite radically different political
leanings. The leader of France's far-right National Front party, Marine Le Pen,
expressed support for the far-left Syriza despite their conflicting political
backgrounds and immigration policies.
