The "Desperation " Vote !

The people of Greece went to the polls and made a "desperation "choice.   They handed 36% of the vote to the left wing anti-austerity party, Syriza, giving it 149 seats in the Greek parliament, just short of the 151 seats needed to govern in it's own right.

Syriza is led by Alexis Tsipras ( 40 ) who is vehemently against the harsh economic conditions imposed by a troika of the IMF, ECG and EU led by Germany as part of a $ 342 billion bailout to save Greece from default - and economic oblivion.  As a result of this forced cut back on services and pensions Greece has been mired in recession with youth unemployment at critically high levels. This has seen a passing parade of Greek politicians of short duration - until Mr Tsipras burst onto the scene with the promise of restoring the Greek economy by renegotiating this imposed austerity - and threatening to withdraw Greece from the EU and abandon the Euro currency unless his conditions were met.

A "Grexit " as this has been labelled has been a nightmare for the EU, but it is now less of a threat since the overall recession has been stabilized and some EU leaders think the Syriza plan is a bluff. Tsipras has muted the exit call and is talking about a drastic renegotiation of the terms of the loan, probably extending the term to reduce repayments so that more money can be used to revive the Greek economy and put young people back to work.

The ball is squarely now back in Syriza's court.  They have clearly won power and it will only take the defection of a couple of uncommitted politicians to give them full reign to implement whatever policies they choose to save the Greek economy.   One of the stumbling blocks could be Germany's Angela Merkel's  insistence on austerity as the only answer to the EU's problems.  If Germany is the holdout to a softening of imposed conditions Alexis Tsipras may take the fateful step of taking Greece out of the EU and establishing it's own currency again by abandoning the Euro.  He could then impose a drastic devaluation, improving the prospect of Greek exports and making Greece a bonanza of a European tourist destination.   It could also set in train a similar move by other struggling members of the EU community.

A lot of world leaders will be holding their breath and waiting to see just how hard the Syriza demands will be to meet.   The world economy is not fully recovered from the 08 recession and Europe seems to be faring worse than the rest of the world.  There is every chance that Britain may face a referendum on continuing EU membership and the stability of this trading block is having troubles integrating the edicts from Brussels with the customs of it's member states.  It seems that Brussels is favouring a "United States of Europe " agenda - and that is clashing with the autonomy that the citizens of many member states desire.   Many people have misgivings about how far a concentration of power in Europe should extend.

The Greek problem arose because Greece failed to bring it's economy under control.  Weak parliaments fragmented power and as a result no measures were implemented to bring spending into line with income.  Taxation in Greece became something of a joke.  The national debt expanded exponentially as borrowings propped up annual deficits - until the eventual day of reckoning arrived.  The level of income was fast approaching the point where it was insufficient to service the needs of past borrowings - and the spectre of default hovered over Greece.

That is a lesson that Australia needs to consider.   Every day we pay $ 30 million in interest to service our debt of $ 245 billion, and a balanced budget is nowhere in sight.   The problem is that the parliament is more interested in playing politics than seriously passing the measures necessary to bring income into line with outgoings.

There seems no prospect of our parliament reaching a reasonable compromise and enacting the legislation necessary to curb spending and balance that against a rise in revenue.   Any cuts in spending will be vigorously opposed - and any increase in taxation will be howled down.   There is an implacable line across which those in government and those in opposition refuse to cross.  The result is political stalemate - and an ever increasing debt riding on the shoulders of every man, woman and child in this country.

Exactly that same scenario brought Greece to it's knees - and it now awaits the decisions of a contentious form of radical government - handed power as a matter of desperation.   Perhaps the same fate awaits Australia unless the people we sent to parliament start making decisions for the good of the nation rather than just enhancing political point scoring.