Austerity on the Ropes as Greek Voters Punish Ruling Coalition

The ruling coalition government in Greece was rebuked at the polls on Sunday as voters lashed out against the parties that supported the drive by the Eurozone's elite financial powers to introduce crushing limits on the Greek budget, gutting social services and worker benefits in the midst of a crippling recession.

The results echoed the defeat of France's pro-austerity president, Nicolas Sarkozy, who was defeated by Socialist candidate Francois Hollande. In Greece, parties on the left and right scored unprecedented gains and sent financial markets into worry as the results spoke plainly that the needs of the people should come ahead of the desires of the European Central Bank or foreign bold holders. This pattern has repeated itself in elections across Europe in recent months.

"This is a message of change, a message to Europe that a peaceful revolution has begun," said Alexis Tsipras, reports The Guardian. Tsipras heads Syriza, a coalition of radical left and green groups that took 16.6% of the vote - the second largest share of the total. "German chancellor Angela Merkel has to know that the politics of austerity have suffered a humiliating defeat."

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The Guardian: Greek voters vent anger towards austerity at ballot box

Voters in Greece sent tremors across the eurozone on Sunday by recording a massive protest vote against EU-dictated austerity. Parties that had participated in an emergency government tasked with passing deeply unpopular belt-tightening measures in return for rescue loans to prop up the near-bankrupt Greek economy were routed at the ballot box.

Instead, with the recession-hit country lurching deeper into poverty and despair, voters backed groups on the left and right that had virulently opposed the deficit-reduction policies demanded by international creditors.

"This is a message of change, a message to Europe that a peaceful revolution has begun," said Alexis Tsipras, who heads Syriza, a coalition of radical left and green groups that took 16.6% of the vote - the second largest share. "German chancellor Angela Merkel has to know that the politics of austerity have suffered a humiliating defeat."

The reaction from Brussels and the Washington-based International Monetary Fund, which have provided bailouts worth EUR240bn, was silence.

With no single party winning enough support to form a government, a period of uncertainty lies ahead as political leaders attempt to form a coalition. Analysts did not rule out fresh elections in June if a new administration cannot be formed.

The specter of political unrest and market turmoil prompted many to ask why the elections had taken place at all.

Voters went out of their way to "punish" mainstream parties widely blamed for years of fiscal mismanagement. "How can we vote for parties to be part of the solution when they got us in this mess in the first place?" asked Poppi Stathera, a mother of two, who said she had been out of work for the past year. "We've been completely destroyed. Our country is in ruins."

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CNN: Austerity on the Ropes

With the election of Francois Hollande as the president of France and a Greek poll dealing a major blow to the coalition government in Athens, voters in Europe are pushing back on austerity.

"I asked for a strong mandate, but people chose differently. I respect their message," Greece's New Democracy party leader Antonis Samaras said late Sunday. "Today's result expresses people's disappointment towards the implemented dead-end economic policy that tested their limits and didn't include the necessary development policy."

Meanwhile, French voters gave victory to the nation's first a left-wing president since Francois Mitterrand left office in 1995. "Austerity can no longer be something that is inevitable," President-elect Hollande said.

Both elections have shaken the markets, which yet again are faced with uncertainty about the fate of the eurozone. Will a new coalition government adhere to the agreements that kept the fragile Greek economy part of the eurozone, or will political forces place Greece's membership among the euro nations once again in doubt? "This could be the start of another deeply uncertain period in Greece with consequences far beyond its borders," observed CNN correspondent Matthew Chance in Athens.

Gone now too is the "Merkozy" Franco-German leadership that has helped steer the euro nations through the debt crisis, adding further to investor uncertainty. "To get anything done in Europe, Germany and France have to agree," Holger Schmieding, chief economist at Berenberg Bank in London, told Bloomberg.

As nations like Spain and the UK drift back into recession, some economists are wondering if the austerity medicine is killing the patient.

"It is what you get when you begin with a diagnostic failure and you end up with the wrong cure," economist Yanis Varoufakis recently told CNN.

Varoufakis argues the perception that debt in Europe is at the heart of what ails the eurozone is misguided. "The problem of Europe is not debt. The problem of Europe is a badly designed monetary system," he said. "(Debt) is one of the symptoms."

One result of the austerity measures is a rise in people taking their own lives, like 77-year-old Dimitris Christoulas, who shot himself last month in Syntagma Square in Athens, site of recent clashes between anti-austerity protesters and the police. As Christiane Amanpour recently noted, this phenomenon is spiking in Greece, Ireland and Italy, coining a new phrase in European newspapers: suicide by economic crisis.

Since the start of the 2008 Financial Crisis, there has been a tug-of-war between economists who advocate stimulus to help economies grow, and proponents of austerity to create structural reforms without kicking the economic can down the line.

On Sunday, elections in Greece and France suggest that battle has yet to be won.

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