After Greek elections failed to produce a winning party with enough parliamentary support to govern, world-wide financial markets dived in heavy sell-offs. Greek political leaders have until Thursday to put together some sort of coalition government, but efforts so far have proved futile. Failure means another election will be scheduled for June 17th. Leftist Syriza has
steadfastly maintained that it represents the voters rejection of EU bailouts based on imposed austerity measures, and has refused to join any government accepting the loan conditions. It received a plurality of votes in the election. A smaller left-wing party,
Democratic Left, is standing by Syriza for now. The socialist PASOK and Democratic Left are two deputies short of a ruling majority in the chamber. The EU governing body has said the Greeks have to take the conditions or contemplate leaving the single currency zone. Without money from the EU, Greece will run out of euros to pay its debt interest as early as next month when a €2 billion rollover in short term borrowing and €600 million in interest on EU and IMF loans come due. Under the terms of the EU emergency funding, a new Greek government must spell out how it will save €11 billion next month. A national default will be momentous, but EU officials are beginning to consider Greece's exit as inevitable.
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Debt bailouts for Greece are not just unpopular with Greeks. The party of German Chancellor Angela Merkel suffered a significant defeat in the North Rhine-Westphalia state election on Sunday. The state contains about a fifth of Germany's population. Christian Democrats received about 26% of the vote, down from 35% in 2010. Opposition Social Democrats and Greens secured enough seats to form a coalition. Merkel's government and the Bundesbank have largely been responsible for the onerous Greek rescue.
