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Is this the end of austerity?

Monday, January 26, 2015 - 02:10

The impact of the Greek elections will be felt across the euro zone with other anti-austerity parties - like the new Podemos party in Spain - expecting a boost from Syriza's success. Sonia Legg looks at the possible consequences.

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Election celebrations weren't confined to Greece. Pablo Iglesias is leader of Spain's version of Syriza. The new leftist party Podemos says it's time to end the four years of austerity dictated by the European Union and the IMF. (SOUNDBITE) (Spanish) PODEMOS PARTY LEADER PABLO IGLESIAS SAYING: "They say there will be chaos in Greece, but I say there already is chaos in Greece, chaos is three million Greeks without medical assistance, chaos is 25% of the workers living in poverty. I don't want them to turn my country into Greece." The latest political poll in Spain show Podemos in the lead - with 28 percent of the vote - just five months ago it only had 10 percent support. Spain's a far bigger economy of course and its reform programme is far more advanced than Greece's. But its unemployment rate is almost as bad (SOUNDBITE) (Spanish) JOSES BELLIDO, 63, RETIRED TAXI DRIVER, SAYING: "For Spain it would be positive and for Europe too, I imagine. Because in Spain things have gone overboard, people are very mistrustful of politicians" (SOUNDBITE) (Spanish) FERNANDO GUTIERREZ, 44, DRINKS DELIVERY MAN, SAYING: "If it works in Greece, there will be a significant change here, I think." Italy too is embarking on tough reforms. And even France has finally started to toe the EU's line But BGC's Mike Ingram says policymakers will be worried. (SOUNDBITE) (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM, SAYING: "There is certainly what economists call adjustment fatigue out there and it is causing political fragmentation. Germany talks about the need for adjustment, but it is only the periphery which needs to adjust, it's not them. If this really is a union they need to meet in the middle and find a common policy and then stick with it - at the moment we are a million miles from that." The issue was high on the agenda as euro zone finance ministers met in Brussels. But there's little support yet for any write-off of Greece's debts, says the Eurogroup's Chairman Jeroen Dijsselbloem. (SOUNDBITE) (English) EUROGROUP CHAIRMAN, JEROEN DIJSSELBLOEM, SAYING: "We fully understand that a lot of work has to be done and we stand ready to support them. Of course membership of the euro zone also means that you comply to all that we have agreed with each other." But Syriza has started a new trend. And the European Union may find it hard to ignore - however much financial markets dislike it.

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Is this the end of austerity?

Monday, January 26, 2015 - 02:10

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