Leading article: The euro survives for another day

It is as well that opposition MPs in the Greek parliament listened to the last-minute pleas from the country's prime minister, George Papandreou – and from the new head of the International Monetary Fund, Christine Lagarde – yesterday and voted to accept the austerity package that is the pre-condition for the EU and IMF bailout of the Greek economy. But the trouble is far from over yet.

Today comes another crucial vote in which the parliament must now decide how to implement the required £25bn cuts. And if that is passed, an even bigger question remains: will the increasingly rebellious Greek public comply with the instruction to pay the price for economic crimes they did not commit?

It is easy to talk of the madness of crowds here. Certainly, however justified the indignation of ordinary people may be, the prospect of Greece leaving what angry street demonstrators may see as an unsuitable currency union, and jettisoning unserviceable debts, has grave implications for the rest of the European Union. If Greece were to default on its debts – as a consequence of widespread civil disobedience in this birthplace of democracy – it would almost certainly be driven from the eurozone. The bond markets would then inevitably turn their attentions to the next weakest link, Spain, as the credibility of the euro crumbled and contagion – as the markets like to call it – spread.

But where the ordinary people of Greece are right to be concerned is over the apparently unchallenged assumption that swift and severe austerity is the answer. They may well look to Ireland, which swallowed the same IMF prescription. Yet after four austerity budgets in just two years, Ireland has entered its fourth year of negative growth. Last year's round of cuts shrank the Greek economy by 5.5 per cent. And that has seemingly served only to limit the country's ability to earn its way out of trouble.

Commentators have been much given to deploying metaphors about Greek tragedy. But tragedy has an inevitable outcome, and it is still far from clear how this Greek saga will conclude.

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