The Eurozone is waiting with bated breath for the line-up of Greece’s new radical anti-austerity government.
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As Prime Minister Alexis Tsipras calls out the names of key players, the rest of Europe is trying to divine whether Greece will quit the Eurozone and throw the economy into even more chaos.
The signs do not look good.
The new economics minister who acts as chief negotiator with the troika that holds the purse strings on the £95 billion bailout is an outspoken critic of how the Greek economy has been handled in recent years.
Yanis Varoufakis has warned the troika – the European Central Bank, European Commission and International Monetary Fund – that he intends to renegotiate the deal that has plunged Greece into the financial doldrums.
Eurozone warning
European Commission head Jean-Claude Juncker, warned renegotiating the debt program was off the radar.
The Eurozone also gave a terse statement reminding the new government Greece would risk exile from the single currency if austerity and debt commitments are not met.
Tsiparas’ far left Syriza party failed by two seats to win a majority and has formed a coalition with unlikely allies ANEL, a far right party.
Tsipras has plans to reverse massive public spending cuts that have seen thousands lose their jobs while those in work or retired have seen wages and pensions cut.
How he and Varoufakis seek to do this with the troika keeping a tight rein on spending remains to be seen.
Neither have experience in government and Varoufakis gave up his job as a university economics professor in Texas to join Syriza only a few weeks ago.
Protest vote
The votes they picked up are seen more as a protest vote against the incumbent old guard who took the bailout cash rather than support for Tsipras and his vague manifesto promises that were unsupported by detailed figures.
All the time, the giants of Europe such as French President Francois Hollande and German Chancellor Angela Merkel will be looking over their shoulders to check the bailout promises are kept.
“We want the new government to foster Greece’s continued economic recovery,” Steffen Seibert, a spokesman for Merkel’, said. “That also means Greece must follow the last government’s bailout commitments.”
Varoufakis has liked the bailout to a line from the song Hotel California – which says you can leave at any time but never check out.
By this he is thought to mean that even if Greece leaves the Eurozone, the debt commitments will still be in place and that’s the problem he needs to find a solution for.
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