Greek leftist candidate wants to call EU's 'bluff' on bail out

Alexis Tsipras, leader of the Left Coalition party, thinks that the EU is bluffing when they threatent to reneg on the bail out deal that is keeping the Greek government from defaulting unless the country adheres to painful asuterity measures.

And he is winning votes because of it.

Reuters:

Alexis Tsipras says Greece's political elite are bluffing when they say harsh austerity cuts are required to keep the country in the euro zone. And he wants Greek voters to call them on it.

With Greece due to vote on May 6, the young leader of the Left Coalition party is urging Greeks to vote out austerity - and the two pro-bailout parties imposing it - arguing Europe cannot afford to kick Greece out of the monetary union.

"It's a pseudo-dilemma, a fabricated myth, that our future in the euro is at risk. It is blackmail by pro-bailout parties, a tool to pressure people to accept measures that bring misery," he told Reuters in this port city in central Greece.

"If any country left the euro under the pressure of markets, then as a herd they would seek the next one to speculate on. The cost for the zone, for Germany, would be huge," he said.

The rhetoric may find little sympathy among Greece's international lenders, but it is winning him voters at home. The 38-year-old leftist's party is one of four vying for third place in national elections on May 6.

Promising to freeze payments to creditors and renegotiate austerity policies included in Greece's latest rescue package, Tsipras' party is expected to take 9 to 13 percent of the vote.

The rise of anti-bailout parties like the Left Coalition is being watched with nervousness by European leaders and the IMF, who fear they could prevent the country's biggest parties from getting enough support to forge a pro-bailout coalition.

If that were to happen, Tsipras would find out who the bluffers are when it comes to bailing out the Greek economy. Greece makes up only 2% of the euro zone's economic output and the leftist is kidding himself if he thinks the EU and the IMF are going to throw good money after bad.

The European Central Bank now has an emergency plan in place to contain the damage if Greece were to go under. They have a trillion euros in reserve as well as the ability to sell short term bonds that would paper over any shock to the system if Greece were to fall.

They would have a problem if Spain or Italy went under, but that isn't likely with a Greek default. So if Tsipras succeeds, he will almost certainly discover who is the bluffer and who is the blowhard.