Europe and the financial markets watched intently June 17 as Greece held general elections. German Chancellor Angela Merkel, French President Francois Hollande and Italian Prime Minister Mario Monti all delayed their flights to the June 18 G-20 summit in Mexico to await the results.
The two leading contenders in the elections were the center-right New Democracy Party (ND), which pledged to uphold Greece's commitments to austerity and honor the country's financial agreements with the European Union and the International Monetary Fund, and the Coalition of the Radical Left (SYRIZA), a group of far-left politicians who pledged to reject Greece's existing agreements, end austerity and maintain the country's position in the eurozone. A third major party, the center-left Panhellenic Socialist Movement (PASOK), shares the ND's position of maintaining Greece's bailout agreement. PASOK had been Greece's ruling party until it formed a unity government with the ND late in 2011.
For a while it seemed these elections would be definitive. Either Greece would reject the country's agreement with its international lenders, potentially being forced out of the eurozone, or it wouldn't. If Greece rejected austerity and forcibly or voluntarily left the eurozone, the country might set a precedent for other troubled states and precipitate a financial crisis -- a eurozone exit and default would likely go hand in hand. Europe would be tested as never before, and it would find out how resilient it is to a wider financial crisis.
But in Europe, the least likely outcome is a definitive one. ND won the election with about 29.5 percent of the vote, earning 78 seats in parliament plus another 50 seats awarded to the winning party by the Greek constitution. SYRIZA received roughly 27.1 percent of the vote, equivalent to 72 seats, and PASOK received roughly 12.2 percent of the vote, or about 33 seats. The rest of the vote was scattered among a host of other parties. A party needs 151 seats to gain an absolute majority in parliament, but since no single party passed that threshold, a governing coalition must be formed. So the ND needs PASOK if it is going to cobble together a governing coalition, but PASOK has said it will not join a coalition without SYRIZA. It is unclear what a coalition would look like between a party that wants to respect the bailout agreement and a party that wants to reject it, but such a coalition is unlikely to happen anyway. SYRIZA wants to form a powerful opposition. Something resembling a government eventually will be assembled regardless of current rhetoric.
The Greek vote has settled nothing. In fact, it may not even lead to the formation of a government; the last election failed to produce a government and forced this election. That the European crisis most severely affected a country so politically fractious could be seen as pitiable. On the other hand, one could argue that the crisis inevitably would be most severe in the most divided country -- not because the divisions caused the crisis, but because the crisis caused the divisions.
The pressure brought on by the circumstances in Greece undermined whatever political order was in place; the choices for policymakers were so limited and so frightening that coherent responses were difficult. Greece has options, but it is unable to choose one. More than anything, Europe wants a decision on its future, whatever that decision might be. On June 17, Greece disappointed Europe not because of the choice it made but because it was crippled with indecision.
Greece's indecisions are at the ground level of Europe. Another and more significant framework for indecision is emerging in Franco-German relations. The French Socialist Party won an absolute majority the same day that the Greeks entered another gridlock. This makes it possible for France's Socialists to form a government without the Greens, giving Hollande a strong and coherent platform from which to operate.