Greeks vote to keep euro
Election results save Europe from financial meltdown,
for now …
Voters in Greece have chosen new leaders who say the country
will stick to strict spending plans and keep the euro as their
currency.
The victory of the New Democracy party brought a sigh of relief
from people across Europe who had feared a massive financial
disaster if the rival Syriza party had won instead.
But the danger is not over yet. The Greek economy is in such a
mess that it may end up having to give up the euro anyway.
Huge spending cuts, or austerity measures, were agreed by the
Greek government in exchange for European loans after it ran out of
money in 2010. Many Greek people are angry about these cuts, which
are causing poverty and suffering for most families in the
country.
The Syriza party had promised to reject the austerity measures,
which could have led to the country being thrown out of the
eurozone. The eurozone is a group of 17 European countries that all
use the same currency, the euro. The UK is not in the eurozone.
If Greece was to give up the euro and did not pay back its
debts, other European countries would be in big trouble. British
banks could lose billions and borrowing costs for other countries,
such as Italy and Spain, could rise, which could in turn cause them
to collapse financially.
But the New Democracy party won the biggest portion of the votes
in yesterday's elections. Its leader, Antonis Samaras, will try to
form a new government that will continue with the planned austerity
measures. He said:
"I will make sure that the sacrifices of the Greek people will
bring the country back to prosperity."
Some people fear that Greece will never be able to recover while
the austerity measures are in place, and that it will soon be
unable to keep up repayments of its loans and have to leave the
euro anyway.
To find out more about Greece and its money problems
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Greeks vote to keep euro
What is going on in Greece? A look at the background to
yesterday's elections
The big problem for Greece is the size of its debts. It owes
other countries at least half a trillion Euros. The Greek
government got into trouble in the first place by spending far more
money than it earned.
In the early years of the 21st century, salaries for public
workers like teachers, nurses and librarians were increased by
almost 50%. At the same time, corruption levels and tax avoidance
was high, meaning that the government's income level was nowhere
near its spending level, leaving it with a huge deficit.
When the credit crunch hit in 2008, Greece couldn't cope and the
country ran out of money. Since then, it has been loaned €240
billion, known as bailout money, from European funds.
In exchange for its bailouts, Greek leaders had to agree to very
strict spending cuts, or austerity measures, to try to reduce its
deficit and start to repay some of its debts. The amount of money
the government could spend on things like wages, schools and
hospitals was slashed. Meanwhile, the amount of tax that workers
had to pay was increased.
The austerity measures are causing lots of suffering in Greece
and have led to protests and riots on the streets. There has been
no economic growth for four years. Businesses are closing all the
time, unemployment is very high, while those who have clung on to
jobs have had to accept massive cuts in their salary, more job
insecurity and longer hours. Thousands of public sector workers
have lost their jobs and the minimum wage has been slashed by
20%.
Tens of thousands of people are homeless and many families are
relying on churches and charities for food. Tales of suicide
triggered by economic problems are common.
Greece's Syriza's party promised to reject the austerity
measures if they were voted into power. European leaders claimed
they would consider this to be going back on the bailout conditions
and Greece would be thrown out of the eurozone and forced to give
up the euro.
But the leader of the Syriza party, Alexis Tsipras, said that
this was a bluff, that Europe needed Greece as much as Greece
needed Europe, and that if his party won the eurozone leaders would
have no choice but to agree to lift the austerity measures, or risk
continent-wide chaos that would result from a Greek expulsion.
Mr Tsipras will not get a chance to call this bluff, after his
party won just 26.9% of the vote, compared to the New Democracy
Party's 29.7%.
The New Democracy Party did not win an outright majority of the
votes so it will still have to work with other groups to form a
coalition government. Mr Tsipras says he will not try to form part
of a new coalition government but will continue to campaign for a
different path for Greece.
"We propose to upset the austerity measures and the bailout," Mr
Tsipras said.
The leader of the New Democracy Party, Antonis Samaras, now has
just three days to try to form a new government.
Mr Samaras told supporters: "I will make sure that the
sacrifices of the Greek people will bring the country back to
prosperity. We are determined to do what it takes, and do it fast.
I will work with everyone in order to achieve our national goal to
come out of this crisis with social unity, jobs and security … for
every Greek."
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