The Economist summarizes the results of yesterday’s election in Greece:
WHEN deciding whether to grant citizenship to an outsider, the Ancient Greeks would put the matter to a vote, tossing coloured pebbles into a clay jar. On June 17th almost 29.7% of voting Greeks picked the colours of New Democracy, a centre-right party that broadly supports the country’s EU bail-out agreement. It was seen as a vote to remain citizens in good standing of the single currency. New Democracy narrowly beat Syriza, the “coalition of the radical left”, which was threatening to rip up the bail-out agreement. That would have resulted in ejection from the euro area or at least ostracism (another Ancient Greek practice) from its fellow members.
On the face of it, this do-over election has generated the kind of result euro-officials were hoping to see in the first election on May 6th. The leader of New Democracy, Antonis Samaras, will now seek to form a coalition with other parties that broadly support the bail-out. The Greek people can look forward to the sweat of fiscal austerity, not the tears of financial chaos. They can expect chronic misery rather than acute disaster.
[. . .]
What about the economy? As our piece last week reported, it has spent the last six weeks in suspended animation. Unfortunately, economies do not keep well in the freezer. The hesitation has wreaked great and irreparable harm. The banks have lost more deposits. The government’s arrears have grown. Erik Nielsen, chief economist of UniCredit, reports that pharmacists have suspended credit to the government, hampering the supply of medicines. The pebbles cast in May have spread damaging ripples through world markets, which have not reversed themselves. They “introduced yet another round of uncertainty” that the second bail-out programme “was not built to deal with.”
