Europe might be heading back toward crisis, and a familiar actor has set things in motion again: Greece. This time, however, the causes are primarily political, rather than financial. The Wall Street Journal reports:
A parliamentary vote to elect a president in Greece failed on Monday, hitting stock markets in Europe’s most precarious countries and setting off worries that new Greek political upheaval could reignite a long-simmering debt crisis.The vote means Greece will hold national elections in late January. The party leading in most polls, the left-wing Syriza coalition, has changed shape in recent years but remains a potent opponent of the austerity-led policies ordered by Greece’s international rescuers and carried out by Prime Minister Antonis Samaras.It is far from clear that Syriza would win the January election with a sufficiently large mandate to govern. Nor is it clear how combative Syriza’s young leader, Alexis Tsipras, might be if he were to assume office.
The EU has converted what was once an acute financial crisis into a chronic political crisis. The risk now isn’t that a euro country will collapse, but that the political pain caused by years of austerity will lead to the rise of anti-euro and otherwise dead-end populist protest parties, that diplomatic relations between euro members will be slowly poisoned and that at some point the political pressure will lead to a renewal of the currency crisis.Greece is not alone in wanting to test the current Eurozone political settlement; impatience with the euro and dissatisfaction with the EU continues to rise across the bloc. Stay tuned, because there will certainly be more where this came from.