Greek Cabinet abandons effort to renegotiate fiscal pact—does the eurozone still want Greece?

Greek Cabinet Abandons Effort to Renegotiate Fiscal Pact—Does the Eurozone Still Want Greece?

Greek Cabinet Abandons Effort to Renegotiate Fiscal Pact—Does the Eurozone Still Want Greece?

Moneybox
A blog about business and economics.
July 5 2012 2:19 PM

Greek Cabinet Abandons Effort To Renegotiate Fiscal Pact—Does the Eurozone Still Want Greece?

After the latest election narrowly brought to power a New Democracy-led coalition, there some speculation that the "Troika" (but basically just Germany) would reward Greek voters for their responsibility by slightly relaxing the terms of the bailout. Instead the Troika stayed firm and today the coalition has officially dropped its efforts to get more generous terms.

This is, naturally, a windfall for the Greek opposition led by the leftist Syriza. You also have to wonder if this isn't the latest sign that the eurozone mainstream really doesn't want Greece to stay in the club. The reward thinking was based on the idea that Germans and others would want to discredit Syriza and bolster the main traditional parties. Instead they seem to be doing the reverse. But although Germany can't kick Greece out of the eurozone, it can lend a helping hand to a party that just might be radical enough to refuse to implement the fiscal agreements that are needed to keep Greece in.