Last weekend's election results in France and Greece, we're told, show that eurozone voters want "growth, not austerity". In the UK, too, the deficit-cutting coalition Government is being widely castigated for "lacking a growth policy".
Odds of a lasting coalition are slim given the massive vote against the austerity coalition. Fotis Kouvelis, SYRIZA party leader and second place finisher in the elections repeated his position that cooperation with New Democracy and PASOK was not in his intentions.
Moreover, Greece's Democratic Left party refuses to join any pro-bailout coalition.
The very instant the Greek "Unity Government" formed it was divided. Antonis Samaras, the leader of Greece’s New Democracy Party, one of the three coalition parties that formed the government says he will not sign a document demanded by the IMF before it will release the next tranche.
That's not all, Samaras actually wants to rework the agreement. Neither will fly (at least with Greece receiving the next tranche of money), and tensions fester.
New Democracy won the Greek election. However, party leader Antonis Samaras still needs to form a coalition.
If this seems like Déjà Vu, it's because it is. We were in the same place following the May election.
Does the Outcome Matter?
This go around, I expect Pasok will reluctantly cave in and form a coalition with New Democracy. The price might be high, such as demanding the much despised Antonis Samaras to step aside.
Regardless, does the outcome matter?
I did indeed used to hear that running up the national debt right now via expansionary fiscal policy would indeed turn the U.S. into "Greece" and deepen the current downturn. It is true that I am not hearing that nearly as much any more--that it is now the burden of financing the debt in future generations that is the problem.
The talks still continue but good news is on the horizon as yet another political party, the Democratic Left, has backed out of the Unity coalition.
Please consider Greece's moderate left says no government possible
The moderate Democratic Left party in Greece says it will not join pro-bailout parties in a coalition without the more radical far-left Syriza.
European officials have had enough of the technocrat leadership in Greece. They have given a week for Antonis Samaras, the leader of New Democracy party, and member of the coalition to sign a document saying he will support the European Union debt plan.
He says he will support the plan (with modifications). The EU wants a signature now, with no changes.
Does a Signature Even Matter?