Greece: Syriza says win sends message to European Union
January 26, 2015, 2:03 am

Syriza leader Alexis Tsipras says Greeks have clearly sent a message about bailout and austerity to the European Union [Xinhua]

Prime Minister Antonis Samaras of the New Democracy party, which had negotiated a bailout plan with the European Union and enforced much reviled austerity measures, conceded defeat late on Sunday with 75 per cent of the votes counter.

The victor, Syriza’s Alexis Tsipras, had campaigned hard against the current EU/European Central Bank bailout program. On Sunday, he said that the election results clearly indicated that his party had won a mandate “undoubtedly cancelling the bailouts of austerity and destruction”.

Consecutive Greek crises

Greece’s second political crisis of the past five years began to unfold in December when Samaras failed in his third attempt to get his choice of president approved by parliament.

Parliament was dissolved, according to the Greek constitution, and snap elections were called..

The whole political crisis puts in the balance ECB bailout packages for the Greek financial system, which in 2009 nearly fell apart on defaulted loans and threatened the Euro currency itself.

The Greek economy began to unravel in 2009 when the government announced it could not meet its huge debt due to massive overspending.

Its budget deficit began to surge shortly after government financed the 2004 Athens Olympics.

The debt crisis was further exacerbated when the global economic crisis hit and the government feared defaulting on its loans. It had no choice but to seek help from the EU and the IMF.

Although the EU and IMF agreed to a total of over $300 billion in bailout loans, they demanded that the Greek government take severe measures to cut spending.

Athens agreed but this measure was met with millions of Greeks taking to the streets in protest sometimes with violence reported between demonstrators and police.

The Syriza party, which has gained popularity in recent months, sees the election as a vote on the merits of the current austerity agreements with the EU and IMF and will likely push for debt restructuring – or even a write-off.

It is unclear how any new government that emerges from the elections will work with the ECB.

ECB chief Mario Draghi and his fellow policy makers already have their hands full regarding the recently announce quantitative easing.

They will now face difficult questions about the possibility of Greece withdrawing from the Eurozone and the impact that would have on the other 17 member nations.