Of the many recent elections in Europe, the one in Greece has been causing consternation in Europe, and beyond. At this moment, a formation of a new government looks very unlikely, after none of the three largest parties managed to build a coalition, and it looks as if the Greeks will be voting again soon. It remains uncertain, whether a new election will return a result for a stable government, that accepts the conditions set by the EU and the IMF. Perhaps, having voted for the extremists of both the right and the left as protest, the Greek electorate will vote for the established parties, but perhaps a future election will essentially return the same results, or even worse.
The exit of Greece from the eurozone is now openly discussed by politicians and other policy-makers, and there seems an air of inevitability about it. There are probably contingency plans if this were to happen, and given its possibility has been alluded to for some time, the eurozone may be better-prepared for this eventuality than a year or two ago. There will be shocks and turmoils in the market, but the euro will probably survive, minus Greece.
With the likelihood of Greece’s exit from the eurozone increasing, the political narrative at the European level has been changing about the fate of the euro and Greece. At first, it seemed that the fate of the single currency was tied to the fate of Greece, and that whatever happens in Greece will have a knock-on effect, or be contagious, to other eurozone countries such as Portugal, Italy and Spain. Now, the Greek crisis has been fashioned as something unique, and something that the euro can cope with: indeed, there are arguments that the euro would be better off without Greece. Furthermore, the stress has been placed on the uniqueness of the Greek situation, which implies that the nature of the problems in other states such as Portugal, Italy and Spain is different, hence the contagion will not spread.
Whatever turns the events take, it is unlikely that there will be any good news for the people of Greece at any point soon.