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Journalism of Courage
Greece has bought itself and the eurozone a reprieve. But fears of a Greek exit persist
The Greeks appear to have made a fresh promise to meet their European commitments. The narrow victory for the pro-bailout New Democracy party in Sundays elections has brought cheer to the eurozone and markets worldwide. The resurrected hope is noticeable in investor opinion that the worst possible short-term outcome another political paralysis and a Greek exit from the eurozone has been avoided. And yet,Europe will still have cause to hold its breath vis-a-vis Greeces new promises. New Democracys majority is extremely thin. Even if it manages to quickly form a broader coalition,its mandate to implement the reforms that the bailout is conditioned on is weak,and there are fears that the streets may erupt again as soon as it tries to do so.
For now,Greece has bought itself and the eurozone a reprieve to keep alive the hope for consensus. If a possible Greek default could trigger panic,it is anybodys guess what a restructuring in Spain or Italy would mean for global banking. At Los Cabos in Mexico,as G-20 leaders discuss ways to fix the eurozones crisis so as to prevent contagion,India and other developing economies would be watching how the Greek drama unfolds.
