Playing with Fire

Europe's Greek Problem

Greece s economy is still in need of repairs. Source: Bloomberg via Getty Images
Greece's economy is still in need of repairs.
  • Why it matters

    Why it matters

    The euro zone might be able to manage a Grexit economically, but it could have enormous political repercussion, not least for Germany.

  • Facts


    • The ECB governing council is meeting on January 22 to discuss launching a program of quantitative easing.
    • Greece’s left-wing opposition party, Syriza, has a 10-percent lead in the polls.
    • Berlin now considers a Grexit manageable.
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The timing couldn’t be more awkward.

Two events will occur almost in parallel later this month that could have long-lasting repercussions for the euro zone.

On January 22, the European Central Bank’s governing council is meeting to discuss its plans for buying up government bonds, a program also known as quantitative easing. ECB President Mario Draghi aims to use the new liquidity to help boost growth in the euro zone’s struggling countries – on condition that they also implement structural reforms.

Three days later, Greece goes to the polls. But Alexis Tspiras, the leader of the Greek opposition party, Syriza, and the likely new prime minister, wants to abandon austerity and is demanding debt relief from the country’s creditors.

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