Greek voters handed power SYRIZA in national elections on Sunday, a popular rebellion against the bitter economic medicine Greece has swallowed for five years and a rebuke of the fellow European countries that prescribed it.
“Today the Greek people have written history” Alexis Tsipras, said in his victory speech late Sunday. “The Greek people have given a clear, indisputable mandate for Greece to leave behind austerity.”
Syriza’s victory marks an astonishing upset of Europe’s political order, which decades ago settled into an orthodox centrism. It emboldens the challenges of other radical parties, from the right-wing National Front in France to the newly formed left-wing Podemos party in Spain, and it sets Greece on a collision course with Germany and its other eurozone rescuers.
Within minutes of the close of the polls, Germany’s powerful central-bank chief, Jens Weidmann, pushed back.
“It is clear that Greece will remain dependent on support and it’s also clear that this aid will be provided only when it is in an aid program,” he said in an interview with television broadcaster ARD.
A message on U.K. Prime Minister David Cameron ’s usual Twitter account, meanwhile, warned that the Greek result will “increase economic uncertainty across Europe.”
Mr. Tsipras staked his campaign on resistance to the policies of fiscal austerity—budget cuts and tax increases—demanded by Germany in return for a €240 billion bailout, and many Greek voters embraced him.
“Europe is self-destructing,” said Polyxeni Konstantinou, a 56-year-old public-sector worker voting in central Athens. “I voted for Syriza because I hope that it will help change the tragic circumstances that now govern Europe. Will Syriza be able to achieve everything it says? Probably not. But whatever it does achieve, then that will be good for Europe.”
It may be less positive for financial markets, which had reckoned on a narrower victory that would have tempered Syriza’s ambitions by forcing it to seek partners in a coalition. The euro slid slightly in the very earliest whispers of trading in New Zealand overnight.
“Greece is two years ahead of the curve” when it comes to politics, said Bill Blain, chief strategist at Mint Partners, a brokerage. “Other countries’ [radical parties] are all going to have their day fairly soon and it’s really about markets trying to anticipate how other countries will follow Greece.”
Europe’s financial markets are far more resilient today than they were three years ago, when troubles in Greece sent investors fleeing from government bonds of other troubled countries. Nonetheless, the spectre of strained conflict in Greece could cause a selloff of riskier assets.
Mr. Tsipras has promised to roll back austerity, first with a spending package aimed at Greece’s struggling poor, and to win forgiveness of some of Greece’s towering debt.
The pressure to compromise will be intense. Under the bailout program’s rigorous schedule, Greece is required to complete a review of its progress with the so-called troika of bailout inspectors by the end of February. Mr. Tsipras has said he doesn’t recognize the troika’s authority.
If negotiations to revive the bailout falter, Greece would be without an umbrella of protection. That program ensures that Greece’s government has access to a stream of cheap financing, and ensures Greek banks have access to cheap funding from the European Central Bank.