After a series of 11th-hour hitches, it was just about possible yesterday to believe that the eurozone crisis had passed its worst. The midnight vote in the Greek parliament on Sunday produced overwhelming support for the austerity programme that was the chief condition for the promised EU bailout.
With their own careers, Greece's euro membership, and perhaps the very survival of the European single currency at stake, Greek MPs did their duty: 199 voted for the plan; only 74 against. Parliamentary democracy had had its say. But it was parliamentary democracy under almost unbearable duress. In the hours before the vote, the cabinet lost six ministers; 40 dissenting MPs were stripped of their party membership and so excluded from re-election. As part of the deal, there will be new elections in two months' time.
The sense of relief emanating from other capitals in Europe and beyond yesterday was palpable. The eurozone lives to fight another day. As things currently stand, Greece will receive the €130bn it needs to stave off a disorderly default and it will be able to write off €100bn of privately held debt. But the agreement has to be finalised by EU finance ministers in Brussels tomorrow; only then will the money be released. And past experience of the roller-coaster of Greek dealings with the rest of the EU suggests that nothing can be taken for granted. This deal cannot be declared done until it is done.
But there was another aspect to Greek democracy on view on Sunday night: tens of thousands of protesters massed in the streets outside the parliament building and violence erupted not just in central Athens, but in other cities, too. Even if Greece is assisted into orderly default, even if the eurozone has been saved for the time being, it is only the most immediate danger of bankruptcy and break-up that has been averted. The Greek bailout, assuming it happens, may close one chapter, but it opens another: one of the biggest, most perilous political and economic experiments that any European country will have embarked upon in living memory.
The Greek austerity programme includes a 20 per cent reduction in the minimum wage, cuts in pensions, and further slashing of public sector jobs. With unemployment officially put at more than 20 per cent, the minimum wage already inadequate, prices rising and the economy moribund, this is hardly the ideal climate in which to prepare for elections. Voters are likely to punish the largest parties in the governing coalition for accepting such exacting terms. The Socialists (Pasok) could find themselves out of power for a long time.
That is, if parliamentary democracy itself has not now been so discredited in the voters' eyes that they start to look elsewhere – to the extremes of left and right, perhaps, or to the streets – for pledges more consonant with their view of social justice. Resentment of the European Union in general, and Germany in particular, has mounted, carrying with it nasty historical overtones. There is a real risk that arguably the greatest success of the European Union – continent-wide, post-war reconciliation – could be shattered.
A huge burden now rests on the shoulders of the Prime Minister, Lucas Papademos. As if he has not borne enough by steering the austerity measures through parliament and securing the bailout, he now has to persuade an angry, impoverished and resentful population to accept them – with the only glimmer of hope a distant prospect of growth in 2013. This is an unenviable task, and his only realistic campaign pitch is to warn how much worse a disorderly default and ejection from the eurozone would have been. The danger is that such reassurances may not be enough.