Not only Greece but also Europe braced Saturday for an election that polls indicate will decimate the two main parties and fail to produce a clear winner, sparking market fears about fresh eurozone turmoil.
In comments widely quoted by Greek newspapers on the eve of Sunday’s vote, German Finance Minister Wolfgang Schaeuble said that if Greece’s new government deviated from its commitments the country would have to “bear the consequences.”
“Membership of the European Union is voluntary,” the minister from the eurozone’s chief contributor to Greece’s 240 billion euros ($314.0 billion) in bailouts and the main proponent of European belt-tightening was quoted as saying.
Greece has written off a third of its debts, is in its fifth year running of recession, one in five workers is unemployed, its banks are in a precarious position and pensions and salaries have been slashed by up to 40 percent.
With Portugal and Ireland also getting aid and Italy and Spain on shaky ground as well, last year there were worries of some sort of break-up of the eurozone. These fears have subsided in recent months but have not completely disappeared.
For markets, it is Greece’s vote rather than France’s presidential decider, also on Sunday, that “weighs heavier” in investors’ minds, said Valerie Plagnol, director of research at the Credit Suisse bank.
Holger Schmieding, economist at Germany’s Berenberg Bank, said there was a 40-percent risk of Greece leaving the eurozone this year, with a “high” chance that no stable government willing to implement more reforms can be formed.
Europe’s press shared these worries, with Germany’s Spiegel saying Greek politicians were behaving like “alchemists,” while Belgium’s Le Soir said it was “vital” for the eurozone that a new government is formed soon.