Far Left Risks Greece’s Expulsion from Eurozone

Leftists’ refusal to meet the conditions of Greece’s bailouts puts its future in the euro at risk.

Greek left-wing parties rejected proposals to support a technocratic government on Tuesday, a last-ditch effort by Greece’s president to avert new elections and possibly bankruptcy.

“We don’t want to consent to any kind of bailout policies, even if they are implemented by nonpolitical personalities,” a spokesman for the far-left alliance Syriza said. Party leader Alexis Tsipras earlier ruled out any coalition that adheres to the conditions of Greece’s two international bailouts.

The Southern European country’s traditional ruling parties have supported a technocratic government for the last six months but were punished in last week’s election, falling two seats short of a majority between them.

The conservatives and socialists have since been in talks with parties that campaigned against austerity. If they cannot agree to form a government, there will likely be new elections in June. Syriza would come out the strongest, according to opinion polls, and may be able to form a coalition with the communists and other left-wing parties.

June is also when the latest tranche in European and international financial support is due. If Greece does not advance its program of fiscal consolidation and market reforms, its European Union and International Monetary Fund paymasters could withhold bailout funds, raising the specter of a Greek sovereign default.

Greece received €110 billion in financial assistance in 2010 and was promised a second bailout worth €130 billion in February. More than half of Greece’s €350 billion debt was subject to “haircuts” at the time. Banks and private investors were forced to write off billions in Greek bonds.

Jean-Claude Juncker, Luxembourg’s prime minister and head of the group of eurozone finance ministers, insisted on Monday that talk of Greece leaving the currency union is “nonsense” and “propaganda” but German finance minister Wolfgang Schäuble told the Welt am Sonntag newspaper that, “We cannot force a country to stay in the euro.” He added, “Questions have to be asked in a European context — what is the best for Europe? As a rule, that is the best for Germany, too.”

Last week, European Commission president José Manuel Barroso suggested in an interview with Italian television that Greece could be made to withdraw from the euro if it rejected the bailout agreement. “Of course, the agreements have to be respected,” he said, “and if they are not respected, it means that the conditions do not exist to continue with a country.”