The Greek Time Bomb

ATHENS – Much is at stake in Greece’s upcoming election. Indeed, the outcome could determine whether the country remains in the eurozone, with far-reaching implications for the rest of the monetary union.

Syriza, a radical left-wing party whose popularity has skyrocketed amid the country’s economic crisis, is the favorite to win, though it is unlikely to gain enough parliamentary seats to govern alone. Instead, it will probably lead a coalition government, though with which other parties remains unclear.

Fundamental to Syriza’s platform is its economic program, designed to counteract the impact of the excessively strict austerity that Greeks have endured for the last four and a half years, in exchange for bailouts from the “troika” of the European Central Bank, the International Monetary Fund, and the European Commission. Pensions have been reduced by 40%, on average, while the middle class is suffering under the weight of crippling new property taxes.

As a result, Greece has fallen into a deep and prolonged recession, with output down 25% from pre-crisis levels. Worse, unemployment stands at nearly 26% – and more than 50% among young people. Yet most unemployment benefits are now being eliminated after 12 months, with the long-term unemployed often losing access to the state health-care system. Add to this a 30% increase in prices for prescription drugs, and it is easy to see why Greek society is unraveling.