The Greek election in May has given a tremendous boost to the fight against austerity in Europe. Progressive political forces are in a position to shape the future of Greece, if they are determined and have clear vision. There is even hope that the Eurozone crisis could be resolved in the interests of working people, not just in Greece but across the continent.

The election has shown that the Greek people do not want the bailout policies imposed by the European Union, the International Monetary Fund, and the European Central Bank. Greeks have rejected the poisonous brew of austerity, privatization, and liberalization, and all parties supporting it were pummeled in the polls. More broadly, Greeks have rejected the political order that has run the country for nearly four decades. The combined vote for the party of the center-left, PASOK, and the party of the center-right, New Democracy, has plummeted to less than 34 percent, when it used to exceed 75 percent. People have said no to the political corruption, backscratching, and sheer obtuseness that have ruined the country.

Yet, the election has also shown that the Greek people are not clear about what they want. Rejecting the bailout went hand in hand with a deep fear of being forced out of the European Monetary Union, and even the European Union.

The contradictory outlook of the electorate is the result of economic and political trends of the last two years. A bailout program was first imposed in May 2010, bringing deep cuts in public expenditure, large tax increases, tighter bank credit, and drastic reductions in wages and pensions. The Greek economy, already weak from the global crisis of 2008-9, plunged into unprecedented recession. National output has gone into a downward spiral, while public debt has risen out of control. And in the midst of this disaster, a second bailout program was agreed to in March 2012, imposing deeper austerity. On conservative estimates, by the end of 2012 the bailout policies will lead to a cumulative contraction of the Greek economy of at least 20 percent, while unemployment will be around 25 percent. When contraction stops, projected annual growth is unlikely to exceed 2.5 percent for the indefinite future. Greece has been pushed into a depression from which there is no obvious way out.

The depression has destroyed the livelihood of wage workers as well as of vast layers of the middle class, including the self-employed, small and medium businesses, and highly paid salary earners. The beneficiary has been big business, which can hope to gain from the elimination of smaller competitors as well as from the deep cuts in wages. Banks, on the other hand, have been protected by receiving funds from the Greek state and liquidity from the European Central Bank.

It is no wonder, therefore, that the bulk of society has relentlessly opposed the bailout programs. Millions have engaged in successive general strikes, participated in mass demonstrations, taken over the squares of the large urban centers for months, refused to pay extraordinary taxes, and so on. The protests have been disparate and uncoordinated, but they have sent a loud message at all times: Bailout policies are a disaster, and the old politics should cease. This is precisely what the election reflected.

The political initiative and the spirit of the moment belong to Syriza.

If Syriza sticks to its radical program, calls for unity among the left, and presents itself as a reliable party of government, it can emerge as the largest party in Greek politics. It will then have the initiative in forming a coalition government of anti-bailout forces. On this basis, Greece might at last break out of the vice of austerity that is currently destroying economy and society. Such an event could propel forward all progressive forces across Europe that are already mobilizing against austerity.

The Greek election has produced a crack in the stifling economic and social order of Europe. Where Greece is heading, Portugal, Spain, and other countries might follow. Austerity has created impossible conditions for the periphery of the Eurozone and it is increasingly unbearable for countries of the core, including France. If progressive forces in Greece show wisdom and determination, they could inflict a major blow on the social interests that have imposed austerity. This could be the first step in the reassertion of the economic and social rights of the working people of Europe, who just may be beginning to put their house in order.

Costas Lapavitsas, author of “Crisis in the Eurozone,” is professor of economics at the School of Oriental and African Studies, University of London.

This is an abbreviated version of his article in the July issue of The Progressive. To read the whole article, simply click here and subscribe to The Progressive for only $14.97. It's like getting 9 issues free!