BEIJING, Jan. 8 (Xinhuanet) -- Greece is set to have its parliamentary election on January 25th. The possibility that its anti-austerity Syriza party might win the election -- has fed doubts about whether the country will stick to the terms of its bailout and remain in the Euro bloc.
Riding a wave of anti-austerity sentiment, Greece's opposition Syriza party is leading pre-election polls with its pledge to renegotiate the country's bailout, worth about 286 billion U.S. dollars.
"If there is an agreement on a slight cut in the debt, probably nothing much will happen, but of course if they decide to play tough ball and they want a real serious debt cut, and want to get rid of all of the debt, then this probably would trigger an exit," Guntram Wolff, director of Bruegel Think Tank, said.
Brussels is worried, but the bloc's biggest economy Germany has signaled it would accept what's being called a 'Grexit' from the Euro.
It only recently emerged that back in 2011 Berlin had drawn up plans to have Greece kicked out of the Eurozone. But German Chancellor Angela Merkel and her team changed plans after it became clear the much larger economies of Spain and Italy would be engulfed by the contagion.
An exit would cost other countries tens of billions, though the bloc is now in much better shape to absorb the blow. However, Greece has already undergone an internal devaluation through wages and costs and Syriza insists it want to keep the Euro. Many analysts expect yet another uniquely European compromise in which everyone claims victory.
"Nobody with political responsibility in Germany or in Brussels or most other countries would like Greece to exit the Euro, because everyone knows the political costs would be very considerable indeed," Daniel Gros, director with Center For European Policy Studies, said.
That doesn't help the European Central Bank, which had signaled its intention to boost the bloc's economy with a massive bond-buying program later this month.
"The ECB most certainly cannot buy Greek debt just three days before a new government might come into place, which reneges on the Greek promises," Daniel said.
The last big unanswered question is: what if Greece leaves and ultimately does very well with its own devalued currency, making an exit tempting for other troubled members like Italy or even France.
(Source: CNTV.com)
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