World braces as Greeks face euro election dilemma
(ATHENS) - Greeks faced a stark dilemma on the eve of elections being watched around the world on Sunday between voting against austerity or for a party more likely to keep them in the euro, at least for now.
The radical left's firebrand leader Alexis Tsipras has vowed to tear up a bailout deal that has given debt-stricken Greece a credit lifeline in exchange for steep budget cuts and says he will renegotiate with creditors from scratch.
"The bailout deal is already in the past. It will be history for good on Monday," the 37-year-old said this week. He has given himself a 10-day deadline for negotiations -- in time for a summit of European leaders on June 28 and 29.
The Syriza party chief says the mood in Europe is shifting against austerity and that the European Union and International Monetary Fund will not want to risk a Greek euro exit that would send shockwaves through the global economy.
"This must be prevented. It would have a devastating effect. Greeks should be mindful of this," Jean-Claude Juncker, head of the Eurogroup and Luxembourg's prime minister, said in an interview with Austrian daily Kurier on Saturday.
"If the radical left wins ... the consequences for monetary union are unpredictable," he said.
At his final election rally in Athens, Tsipras accused his rival, conservative New Democracy leader Antonis Samaras, of defending German Chancellor Angela "Merkel's Europe of the past." "We guarantee the Europe of the future," he said.
Samaras wants a more moderate renegotiation of the deal and accuses Tsipras of playing with fire. At his rally on Friday, he said: "We will exit the crisis. We will not exit the euro. We will not let anyone take us out of Europe."
In public comments at least, European leaders warn that Greece must respect its international debt commitments or risk leaving the eurozone club, and the EU and the IMF have suspended loan payments until after the elections.
Greece has already been forced to seek bailouts twice, first for 110 billion euros in 2010 and then for 130 billion euros this year plus a 107 billion euro private debt write-off -- for a total of 347 billion euros ($439 billion).
There are suggestions, however, that there could be some room for compromise.
A former adviser to the Greek government told AFP this week that the deadline for meeting deficit reduction targets could be extended to 2016 instead of 2014.
For many Greeks this kind of fine-tuning may not be enough, however, as public anger is rising against the steep pay and pension cuts seen since the crisis first exploded in 2009, setting off a chain reaction across Europe.
Greece is now in its fifth year of recession, and many young Greeks are voting with their feet by emigrating, while local media reports warn that the state will run out of cash to pay public sector salaries and pensions on July 20.
"We want the euro, but we also have to live. We can't sacrifice everything," said Syriza supporter Meri Primi, a 45-year-old teacher in Athens whose salary has fallen by 400 euros over the past two years to 1,100 euros ($1,390) a month.
At a New Democracy rally, one party supporter told AFP on condition of anonymity: "I hope fear will win out over anger" -- a reference to party leader Samaras's threat that a vote for Tsipras could bring back the drachma.
Many Greeks are frustrated not only with the austerity foisted on them by international creditors but also with decades of cronyism and corruption of their own governments and the endless bickering between politicians.
"An all-inclusive coalition, that's when Greece will do well," said Michalis Vlavianos, 77, as he sold lottery tickets to top up his monthly pension of 630 euros on a square in front of parliament that has been the scene of violent protests.
No one party is expected to win enough votes to secure a majority in parliament, and the days to come are likely to be dominated by coalition talks, while a euro exit is a real but extreme and certainly not immediate possibility.
Analysts say that New Democracy would find it easier to form a coalition if it wins -- although such a government will struggle to secure the strong majority needed to push through more austerity measures in return for bailout money.
Syriza would find it harder to form a leftist coalition, analysts say.
"Both scenarios are not very easy," said Vassiliki Georgiadou, a political science lecturer at Panteion University in Athens, adding that ideally any coalition should be made up of three parties, not just two.
Polls open at 0400 GMT on Sunday and close at 1600 GMT, with exit polls due immediately afterward and the first indicative results expected after 1830 GMT.