The pro-bailout New Democracy party and the far-left Syriza alliance look on track to gain the most votes in Greece’s voting on Sunday.
In the event ND wins the poll, they would still likely fall far short of a majority, thereby requiring party leader Antonis Samaras to seek out yet another coalition in order to keep Greece within the fold of the euro zone and abide by the EU-mandated austerity program.
But ND may find itself in a hopeless position – indeed, the only other party that supports the terms of EU/IMF bailout, the much-reviled Socialist Pasok, is unlikely to give ND the majority it would need in parliament to maintain adherence to austerity.
Unless ND can find some other partners, the vehemently anti-bailout Syriza, even if it finishes second in the election, could dictate Greece’s economic policy for years to come with the support of smaller anti-bailout parties.
In the event of an outright victory by Syriza in the election, grave questions would be raised about Greece’s immediate financial future as well as the longer-term future of the euro zone as a whole.
IHS Global Insight country analyst Blanka Kolenikova commented that Syriza too would struggle to form a government on its own since it has adamantly refused to cooperate with either ND or Pasok on the bailout.
Syriza’s “only real potential coalition partner is [the Democratic Left], considering the [Communist Party KKE's] opposition to the EU in general,” she stated.
In any case, a Syriza victory would surely accelerate Greece’s exit from the euro zone.
“Much will depend on whether Syriza maintains its current strong anti-bailout rhetoric or whether it is willing to negotiate with Greece's lenders,” Kolenikova said.
“Greece does not have a very positive past record when it comes to implementing measures and reforms demanded by the [European lenders], hence its negotiating position is very weak.”
She added that while Syriza supports Greece’s membership in the euro zone, this will be difficult to maintain if lenders withdraw official funding to Greece due to doubts over the country's reform commitments.
IHS Global Insight estimates the probability of a Greece’s exit from the euro zone at 65 percent over the next 12 months and 75 percent over the next five years.
“The political situation in Greece is very volatile and unpredictable,” Kolenikova added.
“Even if a government emerges, its duration for a full four years will be far from assured. Greek voters therefore may well find themselves returning to the ballot boxes yet again well before the government's mandate expires. However, this outcome would still be more welcome than no government at all and a political vacuum.”
An editorial in Britain’s Guardian newspaper struck a more hopeful note, by declaring that a victory by Syriza “will be the first defeat of austerity in Europe and will have international repercussions.”
The editorial added: “On Sunday, the Greeks have a rendezvous with history. A Syriza victory will be the beginning of the end of the Greek tragedy and a message to the rest of the world.”