May 7, 2012
Greece teetered on the verge of political chaos on Monday, with few signs that any party could form a governing coalition and the prospect of the nation leaving the euro zone looming increasingly large.
Just a day after coming in a weak first in its worst showing ever in national elections, the center-right New Democracy party quickly announced on Monday that it had failed to form a governing majority. While a left-wing anti-austerity party that placed second will now have a chance to form a coalition, many analysts say Greece is unlikely to emerge from its current crisis with a government either capable or willing to carry out the strict budget-cutting mandates of its foreign lenders.
The Greek election and ensuing political tumult showed that “it’s not clear how they can survive within the euro over the longer term,” said Kenneth S. Rogoff, a professor of economics at Harvard and a former chief economist at the International Monetary Fund. That could have grave implications for the rest of Europe.
“A Greek exit,” Mr. Rogoff said, “would underscore that there’s no realistic long-term plan for Europe, and it would lead to a chaotic endgame for the rest of the euro zone.”
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