May 10, 2012 7:07 PM GMT
And yet there are those who continue to believe that austerity is not the answer... we will soon find out how well that turns out for them.
Greece already has left the eurozone. The formality of the paperwork is only a few months away, at most. The notion it can remain in the alliance is based on the fantasies that either the political parties that have gained strength in Greece, through their objections to austerity, will suddenly embrace existing cost cuts or that Germany will agree to a renegotiation of Greece’s bailout terms. Neither has any chance of occurring.
Several research firms and investment banks currently put the chance that Greek will strike out on its own at 50% to 75%. Those figures are optimistic and reflect more hope than reality. Alexis Tsipras of the leftist Syriza party has been given close to a mandate by voters. He says that Greece has had its back pinned to a wall by its financially stronger neighbors. He hopes to create a coalition of other political parties that largely will support his view. That probably will not happen. Another round of elections will begin and, based on the results of the latest election, Syriza and other groups that have rejected austerity are highly likely to gain more power. The formal repudiation of government cost cuts will come before the end of summer.