Guardian
May 21, 2012
1. The issue at a glance
Successive Greek governments have failed to carry out badly needed reforms. The problem isn't new: it goes back decades. As a result the Greek economy is in dire condition. The global financial crisis has exacerbated these problems. The steps needed to remedy the situation are politically difficult, as the recent Greek election result – or lack of one – shows. At the same time Athens is under immense pressure from its EU partners, especially Germany, to implement reforms. Greece's fiscal tragedy is hurtling towards its denouement – the country's bloody exit from the eurozone.
2. Why is it being talked about now?
On 6 May Greek voters rejected the two big parties that supported EU-imposed austerity measures. The centre-right New Democracy and centre-left Pasok parties had held power for four decades. Both were trounced, with voters instead flocking to radical anti-austerity parties on the left and right. Last Tuesday attempts by Greece's president to cobble together a national unity government collapsed. Greece now faces a new election on 17 June. The likely winner is Syriza, a collection of leftists, who reject austerity. On Wednesday a caretaker prime minister, Panagiotis Pikramenos, took charge. If the Greeks catapult out of the eurozone, the contagion could spread to Spain and Italy. The entire European monetary project appears on the brink.
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