Eating your baklava and keeping it too.

Daniel Hannan

Daniel Hannan is a writer and journalist, and has been Conservative MEP for South East England since 1999. He speaks French and Spanish and loves Europe, but believes that the European Union is making its constituent nations poorer, less democratic and less free.

Greece wants the euro but doesn't want the austerity. How much longer can this go on?

By Daniel Hannan Politics Last updated: June 17th, 2012 TELEGRAPH

Some higher authority will have to sort it out

Supporters of the euro, in Athens and in Brussels, have been quick to proclaim victory. Greek Euro-enthusiasts congratulated their countrymen on their level-headedness, while EU officials indicated that the country might be rewarded with a slight relaxation of the bailout terms. Yet there is something contrived, rehearsed even, about the triumphalism.

Look, after all, at the actual results. Greece has repeated itself, only more emphatically, declining to give any party a majority. In Europe's palaces and chancelleries, the hope is that the two old parties, PASOK (corporatist Left) and New Democracy (corporatist Right), might form the core of a pro-bailout coalition: between them, they have a bare majority. But PASOK is indicating that it doesn't want to join any coalition without SYRIZA (populist Left), which in turn says it won't join any government that accepts the EU's cuts package. If no coalition is formed, what next? A third election? A fourth?

The odd thing is that, in policy terms, the parties are closer together than you might think. Foreign media have defined the election as a contest between pro-austerity parties (PASOK and ND) and anti-austerity parties (almost everyone else). But a glance at the party manifestoes reveals that they are all, in varying degrees, anti-austerity. PASOK and ND say they want to renegotiate the bailout terms, slow the cuts, introduce more generous unemployment benefit and, in the case of ND, cut taxes.

Indeed, ND has the worst record of all: it ran up the deficit in the first place, lied about it, and then voted against every attempt by the Papandreou government to tackle the problem which it had created, while simultaneously insisting that Greece must remain in the euro at all costs. The chief difference between the three big parties is that ND proposes tax cuts which, while desirable in principle, are hardly a way to cut the deficit in the short term. All of which makes it hard to believe that an ND-led government, if one can be cobbled together, could deliver the necessary fiscal tightening. None of the fundamentals has been altered. As Allister Heath puts it, Greece has jumped out of the fire into the frying-pan.

The Greek electorate is in denial. It rejects austerity, but insists on keeping the euro. All the main parties duly parroted what voters wanted to hear, making for a fantasy election, a make-believe election, a fingers-in-my-ears-I-can't-hear-you election. The only list which was honest about the necessary cuts – a coalition of three liberal parties – failed to gain a single seat.

What will happen the next time Greece reneges on its promised spending reductions? Will the rest of the EU now lose patience? I doubt it. For thirty years, Greece has been subsidised, indulged and encouraged to look to Brussels for all its solutions. Now, faced with what they see as a problem of the EU's making, Greeks understandably shrug their shoulders and expect Brussels to sort things out for them. And you know what? Given the way the EU has behaved to date, they might just be right.