The left-wing Syriza party has won a big victory in Greece’s election; its main opposition has conceded defeat. The leader of Syriza, Alexis Tsipras, wants to renegotiate Greece’s foreign debts. From Tsipras:
The sovereign Greek people today have given a clear, strong, indisputable mandate.
Greece leaves behinds catastrophic austerity, it leaves behind fear and authoritarianism, it leaves behind five years of humiliation and anguish.
The verdict of our people means the Troika [the IMF, the European Commission, and the European Central Bank] is finished.
The new Greek government will be ready to cooperate and negotiate for the first time with our peers a just, mutually beneficial and viable solution.
http://news.sky.com/story/1414691/greece-to-leave-disastrous-austerity-behind
The next few months are going to be interesting. Will Greece be allowed to renegotiate? If not, will it leave the EU and return to the drachma, which it will undoubtedly seek to devalue to reduce its debt burden and improve its international competitiveness? If it is allowed to renegotiate, will other nations with debt problems be allowed to do so as well? Can the European Central Bank and private European banks take the financial hit of writing down Greek, and possibly other nations’, debt? Whatever happens, will Greek citizens come to realize that they have been living beyond their means for years, that while austerity is no picnic neither is getting cut off by international capital markets, and that there are no easy solutions to their current predicament? Stay tuned.
