The impact and significance of Syriza's victory in the Greek election is already making its mark on Europe and the rest of the world.
Syriza, a leftist anti-austerity party, wants to renegotiate Greece's debt to its three creditors (the European Commission, the European Central Bank and the International Monetary Fund), which currently stands at around 170 per cent of GDP.
The result is not yet a day old and the Greek government has not been formed, but already politicians are politicking and the economists are pontificating. The reaction to Syriza's victory has been a mixed bag of friendly congratulation and stern warnings. Here's how key figures have responded.
The Greek election will increase economic uncertainty across Europe. That's why the UK must stick to our plan, delivering security at home.— David Cameron (@David_Cameron) January 25, 2015
Just like our elections are a matter for the people of this country, so who the Greek people elect is a decision for them.It is the responsibility of the British government to work with the elected government of Greece for the good of Britain and Europe and not to play politics.And it is up to each country to choose its own path on how to deal with the economic and social challenges they face.We have set out our path for Britain: to make sure our country is fairer and more prosperous and balance the books.
People get tired of economic failure, the tired of rising unemployment...what you see is not a defeat of austerity, it is a defeat of economic plans that don’t work and in Britain we have got an economic plan that is working.
“Hope has won” - inspired by huge vote for #Syriza - now EU must listen to people & economists & respond with debt forgivenesss & support
— Caroline Lucas (@CarolineLucas) January 25, 2015
Fantastic Syriza win: austerity does not work for Greece, for Tory/Lib Dem UK, nor for EU; we all need investment in growth not savage cuts— Peter Hain (@PeterHain) January 25, 2015
The position of the European partners and Germany has not changed. Since the beginning of the crisis, the goal has been to stabilise the whole of the eurozone, including Greece, and that remains the goal of our work.
I wish to congratulate you for Syriza’s victory...I hope the election result leads to the forming of a stable government committed to the programme of European integration that Greece and Spain share.
There are internal eurozone rules to be respected. We cannot make special categories for such or such a country.It’s not a question of austerity measures, these are in-depth reforms that remain to be done.
Jean-Claude Juncker (@JunckerEU) January 26, 2015
The policies that Europe has foisted on Greece just have not worked. And it’s true in Spain and the other crisis countries.I think back to World War II. What enabled Germany to become what it is today? Basically, the west said, ‘we’ll forgive your debts’.Greece made mistakes, we can agree on that. But I think Europe made even bigger mistakes. When this crisis began the debt-GDP ratio was 110 per cent, now it’s about 170 per cent. So the medicine they gave was poisonous.
The thing is, we now have essentially the same people who so totally misjudged the impacts of austerity lecturing the Greeks on the need to be realistic.
If Syriza were to win its negotiations with the rest of the eurozone these other anti-austerity parties would look more credible to voters. The victory of protectionist, nationalising Marine le Pen in France's presidential election would be an interesting test of markets' sangfroid (ahem).And if Syriza were to lose in talks with Brussels and Berlin, and the final rupture of Greece from the euro were to take place, investors might well pull their savings from any eurozone country where nationalists are in the ascendant.
Greece faces both a stock (debt) and a flow (competitiveness) problem. Even with debt reduction, second problem will impede recovery.— Dani Rodrik (@rodrikdani) January 25, 2015