Debt threat

The Greek Myth

Greece needs some major reconstruction work.
  • Why it matters

    Why it matters

    Greece’s left-wing Syriza party has vowed to enforce a debt haircut or stop paying back money if it wins national elections, a move that could lead to Greece leaving the euro zone.

  • Facts


    • Syriza is a radical left party that is currently topping polls ahead of elections on January 25th.
    • Greece owes foreign lenders €257 billion ($306 billion).
    • The country’s national debt is currently at almost €322 billion.
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Alexis Tsipras is feeling powerful. If Syriza, the alliance of radical leftists he is leading in Greece, wins the parliamentary elections on January 25 and forms a government, as it is likely to do, Mr. Tsipras plans to put an end to the austerity program.

He expects creditors to waive the lion’s share of Greece’s national debt. Mr. Tsipras plans to spend the money saved from serving the debt on increased pensions, new public service jobs and social niceties such as free health insurance.

The former Greek finance minister, Giorgos Papakonstantinou, used to say that he who is in debt is no longer free. Mr. Tsipras believes the opposite. He believes that who is in debt is powerful. He likes to elucidate this with an illustration. If you owe €500 to a bank, you have a problem; if you owe €500 million, the bank has a problem.

If it were only that simple, the future Prime Minister Tsipras would actually have the very, very long end of the lever in his hand. Greece’s national debt is currently at almost €322 billion ($383 billion).

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