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How Greece’s Election Could Shape Global Economy

June 15, 2012 at 12:00 AM EDT
Leaders around the world are closely watching this weekend's elections in Greece, where the outcome could have serious repercussions for the global economy. Judy Woodruff and journalist John Psaropoulos, reporting from Athens, discuss the atmosphere in Greece and what election results might mean for the rest of the world.
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JUDY WOODRUFF: Leaders around the world are closely watching this weekend’s elections in Greece, where the outcome could have serious repercussions for the global economy.

Polling stations across Greece were busy with pre-election activity today for the second time in six weeks. No party won enough support in last month’s vote to form a government, forcing a do-over this Sunday. And the stakes are high for Greece, Europe and even the broader world economy.

The left-wing Syriza Party insists that, if it wins, it wants to reopen the part of the international bailout agreement that forced austerity measures on Greece. There had been fears of a Greek exit from the euro currency system and resulting turmoil in financial markets. Syriza’s leader, Alexis Tsipras, however, now insists he is focused on improving the terms of the bailout and wouldn’t quit the euro.

ALEXIS TSIPRAS, Syriza Party Leader (through translator): Don’t put your money on a Greek exit from the Eurozone. You will be the losers.

JUDY WOODRUFF: The head of the conservative New Democracy Party, Antonis Samaras, supports the bailout plan, but has called for adjustments.

ANTONIS SAMARAS, New Democracy Party Leader (through translator): We have to change this program in order to stimulate job growth, which is the country’s biggest problem, especially for the youth, while at the same time, we must try to remain within the Eurozone.

JUDY WOODRUFF: The disagreement between the two leading contenders has many inside the Eurozone worried that Greece will once again be unable to form a coalition government. And even European countries that don’t use the euro are taking no chances.

Switzerland and Great Britain have instituted new measures to protect their financial systems.

And for more, I talked with John Psaropoulos in Athens a short time ago. He’s a freelance journalist who has worked for the NewsHour, NPR, and Al-Jazeera, among others.

John Psaropoulos thank you for talking with us.

First, what is the mood there among many of the Greeks? When you talk to them, what do they tell you about this vote?

JOHN PSAROPOULOS, Freelance Reporter: There’s a lot of insecurity, particularly among the old, who remember the Second World War. They have actually lived through starvation, famine, occupation. They have been hoarding money and food in their houses expecting the worst after the election if Greece really were to leave the Eurozone.

Among younger people, there’s a slightly different attitude. People are really taking a hopeful attitude, but a rather fearful one. So really they’re just praying and hoping for the best. It is a time of enormous uncertainty. The election is too close to call. And no one really feels certain about what’s going to happen on Monday morning.

JUDY WOODRUFF: Do you sense, John, that the thinking about what to do has shifted since the original election, the first election date?

JOHN PSAROPOULOS: Well, I think there has been a shift. In the last election, the attitude was a lot more polarized between those parties favoring the memorandum of austerity measures that accompanies the bailout loan and those who are against.

Now there is a bit more of a softening. The hard line radical left, Syriza, has actually softened its line, even though it doesn’t sound as though it has, because in rallies it says it wants to tear up that agreement unilaterally. But in more private interviews with top Syriza economic planners, you hear that, no, in fact, they want to stay within the bailout loan because there is no other way to finance the Greek government for the next year or so.

But they would like to renegotiate the memorandum of austerity measures. And that brings them a lot closer to the conservative pro-memorandum line, which is in some ways very similar. The conservative New Democracy would like to renegotiate certain things, like not having further austerity cuts in salaries and pensions, no more taxes — everyone’s agreed on that — and instead to place the emphasis on growth, because as New Democracy says, for every percentage point of GDP that we make the economy grow, we create 45,000 jobs. That means more tax revenues. That means we reverse the deadly spiral that Greece is in.

JUDY WOODRUFF: John, is there a sense of what happens if neither party wins a strong majority?

JOHN PSAROPOULOS: Well, all the indications have been up until the polling blackout that’s imposed for the last two weeks before an election that both New Democracy and Syriza would emerge strengthened from this second repeat election.

That means that they were both polling up to roughly 30 percent of the vote each. Now, that may or may not happen. But it is too strong an indication to ignore entirely. It seems very likely that both of them will be strengthened. But it does mean also that they have polarized the respective pro-memorandum and anti-memorandum vote. It doesn’t necessarily mean that one of them will achieve enough votes to rule on its own.

That does seem out of reach. So one of two things will happen. Either they will both have to sit down at the table and form a grand coalition, a rainbow coalition between right and left, or one of them will go into the opposition and allow the other to form a coalition with smaller parties, which, of course, will be a much weaker structure.

JUDY WOODRUFF: John Psaropoulos in Athens, thank you very much.

JOHN PSAROPOULOS: Thanks for having me.