Greece Election 2012 – ‘Referendum’ On The Euro
On Sunday, the people of Greece will go to the polls for the second time in just over six weeks to elect new leadership.
At stake is the country’s continued membership in the euro currency, and the future of the euro zone itself. Here is our handy guide to the key events and implications you can expect going forward.
Why Is This Election Important?
This second round is seen, more than anything, as a referendum for Greece’s continued membership of the euro zone. If the people elect a parliament of anti-bailout parties who refuse to abide by the terms of the IMF/EU deal, then international lenders will stop providing rescue loans. The country would then default and be forced to leave the euro zone.
Although Greece’s economy makes up only 2 percent of the euro zone’s overall economic output, a default would send shockwaves throughout the international financial system. Investors, fearful that other countries such as Italy or Spain could also default, would drive up the cost of borrowing to unsustainable levels — forcing them to also seek bailouts.
European banks would stop lending to each other, unsure if they would ever get the money back. Banks around the world would be unwilling to lend each other money, leading to a credit crunch last seen after Lehman Brothers collapsed in 2008.
To prevent this scenario from happening, European leaders, most prominently German chancellor Angela Merkel, has urged the Greeks to embrace austerity.
The election will take place on Sunday, with polling stations opening at 5 am GMT, closing at 5 pm. Exit polls should be announced immediately after close on Sunday.
However, there may be a delay in some regions, with very close results requiring a recount.
Key Players and Parties
Alexis Tsipras- Syriza
The Radical Coalition of the Left (abbreviated to SYRIZA) and its leader Tsipras are Greece’s second largest party. The disparate group of left-wing parties has campaigned against the IMF/EU bailout blueprint, with Tsipras vowing to freeze payments to Greece’s debtors and renegotiate the €130 billion EU/IMF rescue package if elected.
Evangelos Venizelos – Socialist Pasok