Greek Elections delay the inevitable.

Global Leaders hailed the results of the Greek elections on Sunday which resulted in a win for the New Democracy party over the leftist Syriza party who had vowed to tear up the terms of the bailout under the premise that the European Union could not afford to have Greece leave the Euro. With the victory of the New Democracy party led by Antonis Samaras there is a common understanding that Greece will push for a review of their bailout terms as they believe they have accepted considerable pain by electing the pro bailout party to power. Reports coming from Germany suggest that the terms of the bailout are non-negotiable however they would be open to discussing the timeframe surrounding the arrangement.

The problem with the continued financial aid being given to Greece is it is just building on their already insurmountable debt and what they really need is not more funding but a complete write down of what they owe to the Eurozone governments (€161 billion) as well as the European Central bank (€50 billion). One of the major arguments against this is the potential of other indebted countries such as Ireland seeing Greece receiving these huge cuts in what they owe and wanting similar treatment. So the dilemma remains, if the EU continue to enforce these austerity measures on Greece then it is more then likely that the Greek economy will continue to shrink and therefore they will not be able to raise the funds to repay there loans and will require further aid from the European Union.

There is a growing number of people who believe that Greece leaving the Eurozone is no longer a case of “if” and more a case of “when”. This could result in a number of disastrous scenarios with investor confidence in other nations damaged. Confidence in other highly indebted countries such as Spain and Italy could suffer and cause them to move money from these banks to the safer banks in Germany or the Netherlands which may result in more banks defaulting on their payments. Another problem with Greece leaving the Euro is the fact that a switch to the Drachma would result in a huge devaluation of the currency which would make repayments of Greek debts even more difficult. It is time for more radical action to be taken as it is clear that the measures being taken at the moment are not enough to save our faltering economy. If major changes are not made in the near future then this will spiral further out of control and this is something that the vulnerable Irish economy can ill afford.