BRUSSELS (Reuters) – Greece is not yet giving European leaders sleepless nights again, but as the euro zone’s problem child approaches the end of its second international bailout, political uncertainty in Athens is set to test the currency area’s resilience.
The disclosure in late 2009 that Greece had cheated on its figures to conceal a massive budget deficit triggered a rolling crisis that nearly tore Europe’s monetary union apart.
Although there are timid signs the Greek economy may have turned a corner after receiving 240 billion euros ($303 billion)in bailout funds, the political centre may not hold much longer.
Prime Minister Antonis Samaras won a vote of confidence from parliament for his flagging right-left government last Friday but political analysts say a snap election is likely next March that could propel the radical leftist Syriza party to power.
It would be the first time a movement deeply hostile to an EU/IMF bailout programme has taken office in Europe, sweeping aside centre-left and centre-right establishment parties tainted by having implemented harsh austerity measures.
Syriza’s charismatic leader, Alexis Tsipras, says he would reverse some of those policies and demand that international lenders write off some of Greece’s giant 318.6 billion euro debt – 85 percent of it owed to foreign governments and the IMF.
Yet the arrival of the radical leftist in power would not unleash the same panic now that it would have done in June 2012, when Syriza appeared on the brink of a breakthrough.
Early elections will be triggered if Samaras is unable to find 180 lawmakers to elect a new president next February. His coalition has 155 deputies and none of the 23 independent deputies sided with him in the confidence vote.
Trailing Syriza by four to 11 points in opinion polls, Samaras’ conservative New Democracy party hopes to cast off the stigma of intrusive supervision by the European Commission, the European Central Bank and the International Monetary Fund at the end of the year.
Samaras is willing to forego the last 12 billion euros of IMF funds due in 2015-16 to escape quarterly review visits by the troika of official creditors. Instead, he aims to borrow some of the money on the markets and is expected to tap a fund set aside for bank rescues.
However, the IMF, the EU and paymaster Germany are keen to keep Athens under surveillance with a precautionary credit line as a safety net to underpin a return to market funding.
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