The Euro Crisis: Why Greece’s Election Doesn’t Matter

Greece’s flirtation with an exit from the euro in 2011 and two cliffhanger elections in 2012 prompted the darkest days of the debt crisis, halted only by the European Central Bank’s pledge to save the currency come what may.

Political tumult in Greece, plunging stock and bond markets, the threat of default and exit from the euro: the script is eerily similar to the nightmare scenarios of 2010 and 2011. Debt-infested Greece skidded close to the edge then, saved by 240 billion euros (US$297 billion) in emergency loans improvised by European governments led by a reluctant Germany. Now, after achieving some signs of economic recovery, the government in Athens is again teetering, provoking a fresh round of doomsday speculation.

(BRUSSELS) — Greece and its creditors in the 19-country eurozone took visible, if modest, steps Thursday to bridge their differences over Athens’ demands to lighten the load of its bailout, but an imminent deal appears still to be some way off.

(BRUSSELS) — Greece and its creditors in the 19-country eurozone took visible, if modest, steps Thursday to bridge their differences over Athens’ demands to lighten the load of its bailout, but an imminent deal appears still to be some way off.

A Greek exit from the euro area would have “incalculable” consequences and leave Germany facing the biggest loss on European financial aid extended to Greece, a lawmaker in Chancellor Angela Merkel’s coalition said. “Europe can’t afford a Greek exit,” Joachim Poss, the Social Democratic Party’s deputy finance spokesman in the German parliament, said in a phone interview. Suggestions by allies of Merkel that the 19-nation currency bloc could weather Greece’s departure amount to “playing with fire at a fragile moment in the stability of the euro area,” he said.

LONDON/BRUSSELS — The need for a new rescue program for Greece promises a drawn-out drama of late-night negotiations but is unlikely to trigger the sort of crisis that has threatened the breakup of the euro in the recent past. That the collapse of the single currency is no longer an immediate danger reflects the solidity of the political bargain that saved Greece a year ago.

Finance ministers from around the Eurozone are meeting in Brussels Monday for what will be the third session of fraught talks in less than a week on how to talk Greece’s new government off the window ledge and persuade it to carry on servicing its crushing debt burden with a deal that would keep it from defaulting and leaving the currency union.