Financial Times
May 10, 2012
The people of Greece have rejected austerity. You can scarcely blame them for throwing out a corrupt political establishment. It is also indisputable that the economic prescription written by its international creditors is astonishingly harsh. The problem is that anger is not a policy. As often as Greece votes against austerity, it cannot avoid it.
Greece is sailing between the Scylla of creditor-imposed depression and the Charybdis of the chaos of unilateral debt repudiation and exit from the euro. At this week’s election more than two-thirds of voters backed parties opposed to the spending cuts, tax increases and structural reforms imposed by the EU and International Monetary Fund as the price of a second bailout. Yet the same proportion of these voters also say that they want to keep the euro.
This fundamental contradiction is not sustainable. The moment is approaching when the decision will be taken out of the hands of the politicians in Athens. Financial deadlines are looming. The outcome of the latest poll – and the prospect of another inconclusive election in June – very much suggest Greece is heading fast towards the whirlpool of disorderly default.
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