Over the past week the world has learned a lot about how Greek elections function. After a ballot is held, if there is no clear majority winner (there wasn’t), each party gets a chance at putting together a coalition to hold parliamentary power, in order of their success at the polls. If each of these parties fails, (which they did), the President has one last chance to meet with parties and form a “unity” government (they collapsed). When that fails (it just did), new elections are called (a month from tomorrow).

We’ve known for a few days now this was happening, with radical leftists Syriza coming in second place in the election and rising in the polls from there, it’s now acknowledged that they’d probably win the next round of elections. This set off a predictable wave of terror in the world’s financial community, causing markets to shudder and spreading rumours that Germany might be willing to budge on their hard-line austerity policies. At least as likely an outcome is that this would lead to a Greek “exit” from the Eurozone and probably the destruction of the European common economy as we know it. Syriza couldn’t have asked for a better reaction.

The Greek people may finally get their referendum on austerity, the mere mention of which was enough to see their elected Prime Minister deposed and replaced by a “technocrat” supported by Europe’s central bankers. In this climate, there’s every reason to expect they’re going to vote “no”, and most of the world knows it. Whether or not Syriza can effectively govern the country isn’t the issue – nobody’s doing that now. At best their win would be a “solution” but at worst it’s revenge, and I suspect either will do at this point.

How could they do this to us!?!

I’m sure that’s a question ordinary Greek people have been asking for some time now. Their economy was utterly destroyed, their government deposed, their “national character” thoroughly dragged through the mud. European financial elites made an example of Greece in their attempt to bully others into accepting austerity programs, and as long as the country’s creditors got paid, few cared what happened to Greeks themselves. Maybe now they will.

Will this be the catalyst for a massive market crash? That’s very possible, but if so, that doesn’t mean Greek voters (or rioters) are to blame. The world’s economies are like a powder keg right now, from Beijing to Boston. If it isn’t Greece it’ll be Spain, Italy or something else entirely. Financial elites have pointed fingers at everyone but themselves, but it’s clear no poor folks set this up – bubbles aren’t the product of union wages or welfare. Will poor folks suffer? Undoubtedly, but that’s on Goldman, not the Greek people. If anything, this only shows how desperately things have to change.

Greece is teaching a valuable lesson here: austerity is not inevitable. If we actually stand up, they will back down. These policies were driven by fear and panic, claiming the future of Europe was at stake. Only now are elites realising what kind of position this puts Greece in – they’re holding all the cards, and they just called everybody’s bluff.

Advertisements