Every time Eurocrats declare that the economic crisis is over, it comes back with a vengeance. For six years, the Brussels elites have been periodically assuring us that the Eurozone has shaken off the bug; yet, like some chronic condition, it keeps returning. Usually in Greece.
Yesterday, Greeks voted for a party that, though it says it wants to keep the euro, rejects the conditions that the other members have set. In particular, it insists on a big debt cancellation.
The EU has made clear that it will not write off any more Greek debt. Doing so would, it fears, encourage other struggling Eurozone states to default, and so cause the project to unravel. But Syriza, the party that won yesterday’s general election, is equally uncompromising. Its leader, the telegenic Alexis Tsipras, tells voters that he will cancel the austerity and repayment programme ‘on my first day in office’.
Both sides claim they want Greece to stay in the monetary union. But a game of chicken is now under way and neither player can easily swerve aside. For Mr Tsipras, any compromise with Brussels would mean a betrayal of his supporters and his convictions. He fought the previous election on an anti-euro platform, and seems genuinely relaxed about going it alone.
The EU has, if anything, even less room for manoeuvre. It has repeatedly eased Greece’s bailout terms, yet every such loosening produces more importunate demands.
Angela Merkel, the German Chancellor, has let it be known that she is prepared to let Greece leave the euro if necessary – a reversal of her position in 2011.
The bailout funds are now in place, she reasons. Many of the banks that had lent money to Greece have been repaid, and Europe’s banks are in a stronger position than they were four years ago, and the EU has a large fund in place to support other Eurozone states. In any case, she would hardly be human if she were not getting tired of being caricatured as a Nazi by the people she is subsidising.