The Greek Election and the Future of the Euro

Greek voters will soon head to the polls for the second time in six weeks after the May elections resulted in political gridlock. The fate of the eurozone is widely perceived to hang in the balance. Syriza, now the second largest party, is vying with New Democracy for first place and has promised to reject the terms of Greece’s EU bailout if it forms the next government. Germany has sent clear signals that it will require Greece to keep its international obligations. As a result, markets are bracing for turbulence after the new elections on June 17. The U.S. and European economies are so interdependent that a “Grexit” from the euro would have serious implications for the United States, potentially pushing it back into recession.

On June 14, Brookings hosted a discussion previewing the legislative elections and their implications on the eurocrisis. Panelists included: Vice President Kemal Derviş, director of Global Economy and Development at Brookings; Brookings Fellow Douglas Elliott; Brookings Nonresident Senior Fellow Daniel Speckhard, a former U.S. ambassador to Greece; and Desmond Lachman, resident fellow at the American Enterprise Institute (AEI). Brookings Fellow Thomas Wright moderated the discussion.