Grexit still unlikely after Syriza win

by Hugo Dixon

Reuters
January 26, 2015

Syriza’s resounding election victory has pushed Greece closer to quitting the euro zone. But a so-called Grexit is still not the most probable outcome, as the radical left group should be able to cut a deal with its European creditors to avoid bankruptcy provided both sides show maturity.

Alexis Tsipras, Syriza’s leader, has made a host of promises that he will not be able to deliver while sticking within the constraints of the country’s mega bailout programme. He wants to increase pensions and the minimum wage sharply, hire back sacked civil servants, reverse the liberalisation of the labour market and cut Athens’ vast debts to other euro zone countries.

The problem is that Greece’s creditors, led by Germany, are not prepared to keep lending Athens money if it does not make further progress in reforming its economy and balancing its budget.

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