At the height of the euro-zone crisis in 2011–12, governments in Greece, Spain and other cash-strapped countries were given enormous bailouts in exchange for pledges to enact reforms and accept painful austerity. A few years later, progress has been made, but voters in those countries are growing tired of economic misery. In January a radical left-wing party won elections in Greece by promising an end to the pain: Syriza says it will write off most of Greece’s $363 billion worth of debt and defy further demands for austerity.
Some in Europe have begun to fear that Syriza’s defiance will embolden similar movements in other countries, fatally undermining all that has been accomplished. Podemos, a left-wing anti-austerity party in Spain, has already posted huge gains in opinion polls. A Podemos government could join Syriza-led Greece in refusing calls for more sacrifice. Voters in Italy and France might then join the protest. That would spell an end to the euro–and perhaps to the E.U.
This isn’t likely to happen. The so-called troika–the European Central Bank (ECB), the European Commission and the International Monetary Fund (IMF)–and Germany, the biggest contributor to Greek bailouts, have a great deal of leverage. They have the money Athens needs to keep the lights on, and for all of Syriza’s demands for concessions, everyone involved knows that absent a negotiated deal, Greece will default on its debt, and its economy will collapse. Polling suggests that Greek voters want an end to austerity, but strong majorities also want to remain within the E.U. and keep the euro. Syriza will have to cave.
Podemos is now telling voters what they want to hear, but Syriza will demonstrate that those things aren’t true. Spain’s unemployment remains well above 20%, but the country’s economy is now growing faster than the European average. On election day this fall, few voters will want to import Greek-style turmoil. That’s good news for the future of the euro zone.
But the over-the-top demands of Greece’s new leaders suggest they might not recognize that they’re fighting a war they can’t win. If Syriza overplays its hand, it could generate enough scary headlines to provoke a national banking crisis ahead of critical repayments to the IMF and ECB. If the Germans and the troika are too complacent to offer Syriza a face-saving way to back down, they could join Syriza in stumbling into a debt default that would force Greece out of both the euro and the union.
Once that precedent is set, no one knows where it might lead.
Foreign-affairs columnist Bremmer is the president of Eurasia Group, a political-risk consultancy
‘Our negotiators are trying to take the weapon of sanctions away from the enemy.’
AYATULLAH ALI KHAMENEI, Iran’s Supreme Leader, in a statement carried by the official IRNA news agency on Feb. 8, giving his strongest defense yet of his country’s negotiations with the U.S., Russia, China, France, Germany and the U.K. over Iran’s nuclear program. Khamenei, the country’s highest authority, has been skeptical of the negotiations even as Western sanctions have buffeted the country’s economy. Diplomats are working to agree on the outline of a deal before a late-March deadline.
Five countries had movies nominated for the foreign-language Academy Award ahead of the Feb. 22 ceremony. Here’s a sample of countries that have won Oscars in that category:
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Use of Force
Parts of the Douma suburb of Damascus were left in piles of rubble on Feb. 9 after what activists said were attacks by forces loyal to President Bashar Assad. President Barack Obama asked the U.S. Congress on Feb. 11 for a new, three-year authorization of war against the extremist Islamic State of Iraq and Greater Syria (ISIS). The group has seized large parts of both countries amid the chaos.
Cuba Opens for Business
Streaming-media company Netflix announced on Feb. 9 that it would make its service available in Cuba, a largely symbolic move in a country where just 5% of people have access to the World Wide Web. But as the U.S. government prepares to reassess its embargo on the island nation, here’s a look at the industries that are poised to benefit:
Easing U.S. travel restrictions could pave the way for an estimated 2 million Americans to visit annually by 2017. U.S. cruise companies will look to add Havana to Caribbean routes.
Cuba’s territory may hold up to 4.6 billion barrels of oil and massive amounts of natural gas. U.S. energy companies will be champing at the bit for the chance to tap those reserves.
The White House’s move in January to lift sanctions on farming equipment could help boost domestic output in a country that currently depends on imports for 80% of its food.
Cuba’s premier health care system–it has the lowest infant-mortality rate in the Western hemisphere–will likely draw American “medical tourists” who are looking for affordable care.
The estimated value of a copy of the Magna Carta from the year 1300 found in a scrapbook in Kent, England; the treaty, first written eight centuries ago this year, established the principle that no one was above the law
Nigeria postponed presidential elections set for February until March 28, citing fears of worsening attacks by the Islamist group Boko Haram. But incumbent Goodluck Jonathan, facing strong opposition, was accused of trying to buy extra time to make his case.
Japanese Prime Minister Shinzo Abe said he wants to begin the process of revising the country’s pacifist constitution in 2016, to allow Japan to respond to threats posed by groups like ISIS, which killed two Japanese hostages in January.
Paulina Vega, Colombia’s newly crowned Miss Universe, said she was “ready and willing” to attend peace talks between her government and Marxist rebels, after the group invited her to join negotiations in Cuba aimed at ending the five-decade conflict.
This appears in the February 23, 2015 issue of TIME.
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