The Continuing Greek Tragedy

The crisis in Greece continues as the three main parties have failed to thrash out a coalition agreement. They have agreed that another general election will be held in the coming weeks, this election is completely unpredictable with some experts believe that after voting for anti-bailout parties in the last election, people will move back to the centre. Yet most experts believe that the anti-bailout parties will gain more ground the next time the Greeks go to the polls.

SYRIZA leader, Alex Tsipras

If the Germans and Brussels want to avoid the anti-bailout parties winning they must negotiate ASAP with the pro-bailout parties, give them some concessions. Then PASOK and New Democracy can go to the voters and tell them that the bailout can still work, in the hopes of marginalising SYRIZA. The reality is, if SYRIZA were able to form an anti-bailout party after the next general election, then Greece would almost certainly go bust and have to leave the Euro which would have devastating affects around the EU. Spain, where borrowing is almost unsustainable already, would need a bailout immediately and any chance of a recovery in Ireland or Portugal would be out of the question. Likely Greece would drag the rest of the world back into recession. This could result in a break-up of the Euro and a destruction of the economies of the PIIGS countries, this could be worse for Germany than many other countries, as Germany’s central bank has lent €644 billion euros to other European central banks and a break-up of the Euro would mean that it wouldn't get most of that money back. Germany must defend Greece from financial collapse, otherwise the country will suffer the consequences.