Greece Still Wants Free Lunch

At the Wall Street Journal, "Greece Votes Again" (via Google):

Nobody said the second time would be the charm. Greece's political parties failed to form a government after last month's parliamentary elections, and neither Greek citizens nor their creditors have any appetite for another inconclusive result after Sunday's runoff vote. But no number of polls will spell political stability for Greece unless Athens can show the credible commitment to reform that the Greek establishment has dodged for decades.

Not that too much in the way of reform is on offer at ballot boxes this weekend. The question after Sunday will be whether either of the two main parties can deliver Greece from the clientelism and corruption that bloat its government and leave its private economy moribund—even if they manage to form a government that can serve out the year.

Ahead of the election, the center-right New Democracy party looks to be leading the Coalition of the Radical Left—Syriza in the Greek abbreviation. But once again no party is likely to claim an absolute majority. Syriza was the sleeper story of last month's elections, winning second place with 16.8% of the vote; the party took less than 5% three years ago.

Syriza's ascent has given officials in Brussels and Berlin more than a few sleepless nights. Alexis Tsipras, the party's fiery 37-year-old leader, vows that he'll tear up the EU-IMF bailout agreement but keep Greece within the euro zone. If he becomes Prime Minister, has said he'd nationalize Greek banks, halt privatizations, reverse pension and wage cuts, and scrap the current pledge to fire 150,000 government workers.

But equally worrisome is the centrist parties' collapse into irrelevance. New Democracy chief Antonis Samaras has made the right noises about tax freezes and structural reforms, but if his party wins first place on Sunday it would likely have to form a coalition with Pasok, the socialist party that won third place in May. A joint government with Pasok and one of the smaller parties would be encumbered by coalition politics and peopled by many of the same officials who swelled Greece's public debt and turned "Greek accounting" into an international punchline.

Any government that is formed after Sunday will have to move carefully or face swift collapse. Mr. Tsipras thinks Angela Merkel is bluffing when she says she'll cancel Greece's funding if Athens cancels the bailout terms. He says the German Chancellor and other EU leaders are too committed to keeping Greece in the euro zone not to make concessions....

We hope the Greeks sort it all out, and that the Acropolis doesn't get destroyed in the process. But at one level the politics is a sideshow to the central lesson of Greece's crisis. For decades, and especially once they joined the euro zone, Greeks borrowed to consume beyond their means, and in 2009 the bill came due.

On Sunday Greeks try again to decide on the means of repayment: Mr. Samaras is offering to swallow the austerity medicine but seems fated to under-deliver on the restructuring that needs to accompany it. Mr. Tsipras is promising a free lunch. A Syriza victory Sunday would suggest that millions of Greeks still believe in no-cost dining.

That this is where Greece has come should give EU policy makers pause. Spanish banks are being bailed out and a deeper transfer union looms, but Greece shows that there are limits to what rescue money can achieve when it is poured into a broken political system.

The larger question raised by the current state of Greek politics is whether more transfers and more fiscal union can make Greece and the rest of Europe more like Germany. Or will they make European politics more like Greece's?

RELATED: At the Australian, "Greek leftist Alexis Tsipras slams 'Merkel's Europe' as election looms."

And at the Los Angeles Times, "Greece voters face tough choices at polls: The upcoming vote is seen as a referendum on Greece's Eurozone membership." And the New York Times, "Europe Braces for Greek Vote — and Maybe More."