Poll result sparks fresh fears for eurozone

The election in Greece of a radical party that wants to overhaul the country’s bailout programme raises new uncertainties for the eurozone. But several European creditor nations hinted they will seek a compromise deal to avoid disastrous scenarios, like Greece falling out of the euro.

Financial markets took in their stride the victory of the left-wing Syriza party after several leaders in the 19-country eurozone suggested they were open to discussing how to lighten Greece’s debt burden.

The country has since 2010 needed €240bn in loans from fellow eurozone countries and the International Monetary Fund to avoid bankruptcy.

The talks are expected to be tough and protracted, however, as regional heavyweight Germany has so far taken a hard line on debt in Europe.

Syriza is calling on the eurozone to ease the spending cuts and tax increases required in Greece’s bailout programme and a lightening of the country’s rescue loans. The debt is at a level many economists think is unsustainable.

A tough stance by either side could, some fear, cause Greece to fall out of the euro, a development that could cause huge turmoil for Europe and the currency union.

Syriza leader Alexis Tsipras joined with the small right-wing Independent Greeks party, united mostly in their opposition to the austerity measures imposed by the other eurozone nations in exchange for the loans. The tough spending cuts and tax hikes were meant to reduce debt but have also put the economy through a depression, causing unemployment and poverty to surge.

Already yesterday, there was more than one hesitantly outstretched hand.

Jeroen Dijsselbloem, the Dutchman who chairs eurozone finance ministers’ meetings, said that even though “there is very little support for debt write-offs,” there is room to “come back to debt sustainability issues” in the future.

His views were echoed by the leader of Finland, a country that has long been among the most unmovable on austerity issues.

Finnish Prime Minister Alexander Stubb said that even if he opposes forgiving Greece’s debts outright, he would be prepared to discuss extending loan repayments.

Germany was non-committal beyond stressing that commitments needed to be kept.