Greek voters went to the polls on Sunday to decide the make-up of their next government and, in many ways, the fate of Europe's single currency, the euro. The result of the closely fought election: A "knife-edge" victory for the center-right New Democracy party, which supports enacting EU-backed austerity measures that Greece must observe to remain a member of the eurozone, narrowly beating the leftist Syriza party, which ran on a strong anti-austerity platform. The 30 percent to 27 percent edge gives New Democracy (ND) 129 of the 300 seats in parliament, and ND leader Antonis Samaras is expected to form a government with the once-dominant centrist Socialists (Pasok). Syriza head Alexis Tsipras vowed to keep his party in opposition, pushing for stimulus spending and against austerity. Where does this leave Greece, Europe, and the global economy? Here, four takeaways:
1. Greece will stay in the eurozone for now...
"This is the outcome that markets have most wanted to see," says Joe Weisenthal at Business Insider. If New Democracy and Pasok form a workable coalition — which seems likely — the Greeks will accept austerity and at least temporarily avert a disaster for the euro, Europe, and the rest of the world. But Syriza won more than one-fourth of the vote, proving that "a large segment of the population despises the EU-imposed austerity measures," says André Gerolymatos in Canada's Globe and Mail. But a loss is a loss, and in the end, "the Greeks came to edge of the precipice but at the last minute stepped back."
2. ...But may still exit later
The fact that "the Status Quo party" beat the "the Stop the Austerity Party" should "give a financial markets a brief breather," with the emphasis on "brief," says James Pethokoukis at the American Enterprise Institute. Even if ND and Pasok can form a pro-euro coalition, Greece's "economy is just too sickly to met the bailout requirements," even if Germany loosens them a bit. The bottom line: Uncertainty about Greece's financial stability, even with these austerity measures, will "drive the EU into a deeper recesssion," meaning "Greece is still likely headed for the exits this year."
3. This is a Pyrrhic victory for the pro-euro side
New Democracy essentially won the right "to continue pursuing an unworkable policy," says Paul Krugman at The New York Times. "Yay!" And the scuttlebutt in Greece is that "Syriza didn't really want to win," since one more (inevitable) failure on the ND's part will completely discredit "the entire Greek center," leaving Tsipras to pick up the pieces.
4. Germany will decide Greece's fate
If you want to know Greece's future, look to Berlin, says The Wall Street Journal in an editorial.. New Democracy's Samaras will almost certainly ask Germany's Angela Merkel to relax the terms of the bailout, and "would the German chancellor dare to say no, thus becoming the proximate cause of a first euro exit?" She "might have preferred a Syriza victory," since it would have given her "an excuse to cut Greece out of the eurozone." Perhaps, but while Greece is "not without sin," its problems are largely due to "other people's hubris," says Krugman in The New York Times. "The only way the euro might — might — be saved is if the Germans and the European Central Bank realize that they're the ones who need to change their behavior."