The victory of the left wing Syriza party in Greece in the recent election has raised questions about how the government will satisfy creditors in view of its mandate to reduce austerity measures in the debt-ridden state. Syriza leader Alexis Tsipras was sworn in as the Mediterranean country's Prime Minister on Monday, after his party formed a coalition government with the right wing Independent Greeks Party.
Greece's troubled economy has heavily depended on bailouts from the International Monetary Fund, European Central Bank and the European Commission, along with individual donor states. Since 2010, Greece has received a total of 240 billion euros bailouts on conditions ranging from a freeze on government pensions and large cuts in salaries of government employees.
How exactly Tsipras intends to cut back on unpopular austerity plans and have the country's colossal debt written off remains to be seen. These measures seem to have appealed to the electorate in the troubled economy, but they may not rest well with lenders. Any attempts to have loans written off may further jeopardize the nation's place in the eurozone.
The growing leftist movement in Greece comes at a time when unemployment is at record levels. Syriza's message of anti-austerity has resonated across troubled economies in Europe, with the anti-euro Podemas Movement in Spain and Five Star Movement in Italy gaining momentum. "Our victory is, at the same time, it's a victory for all the people of Europe that are fighting against austerity that's ruining the common European future," the newly sworn in Prime Minister acknowledged.
Tsipras was optimistic when speaking to large crowds that had gathered to celebrate Syriza's victory when it first broke out to the public. He said: "Greece leaves behind the austerity that ruined it, leaves behind the fear, leaves behind five years of humiliation, and Greece moves forward with optimism and hope and dignity."
Yet, a showdown with lenders seems almost inevitable if the Greek premier plans on sticking to his campaign promises. Benoît Cœuré, who is European Central Bank Executive Board, while speaking to CNN following Syriza's election victory, said Greece would have to stick to what he described as the "European rules of the game" and pay back its debt.#Finance