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Journalism of Courage
Greek left-wing leader Alexis Tsipras on Monday agreed to team up with a right-wing party to form a new hardline, anti-bailout government determined to face down international lenders and end nearly five years of tough economic measures.
The decisive victory by Tsipras’ Syriza in Sunday’s snap election reignites fears of new financial troubles in the country that set off the regional crisis in 2009. It is also the first time a member of the 19-nation euro zone will be led by parties rejecting German-backed austerity. Within hours of victory Tsipras sealed a coalition deal with the small Independent Greeks party which also opposes Greece’s EU/IMF aid programme.
The alliance is an unusual one between parties on the opposite end of the political spectrum brought together by a mutual hatred of the 240-billion-euro bailout programme keeping Greece afloat at the price of budget cuts.
“At first sight this looks like a very strange marriage, but both parties share a strong opposition to austerity,” said Diego Iscaro, an analyst at IHS Global Insight.
Together with last week’s decision by the ECB to pump billions of euros into the euro zone’s flagging economy despite objections from Germany, Syriza’s victory marks a turning point in the long euro zone crisis.
It signals a move away from the budgetary rigour championed by Germany as the accepted approach to dealing with troubled economies, though it is unclear the extent to which Syriza will be able to wring concessions and aid from creditors.
EU open to Greek debt extension, not forgiveness
Brussels: Europe showed a willingness on Monday to give Athens more time to pay back its debts, but little sign that it would yield to a new Greek government’s demands of debt forgiveness.
European Union leaders and policymakers responded to Greek anti-bailout party Syriza’s election victory on Sunday with warnings that a debt restructuring for Greece would send the wrong message to other euro zone members.
Euro zone finance ministers gathered in Brussels on Monday afternoon to consider how to deal with Greece after the change of government, especially given that the existing Greek bailout programme expires on February 28.
