At the extraordinary informal summit of 23 May, EU leaders agreed that the issue is no longer taboo and that each was studying the issue for themselves. At the same time they repeated their wish that Greece should remain in the eurozone – provided, of course, that it honour the commitments to its creditors. And there lies the central rub of the question: more than it is a question of economics, the “Grexit” is pre-eminently a political issue – just as was Greece’s joining the eurozone at a time when officials in Brussels and elsewhere knew very well that, like the Italians before them, the Greeks were not ready.

It is up to Europe’s leaders to decide whether or not they are willing to assume the economic costs to their banks and their taxpayers of a Greece exit from the eurozone – and the political costs too: loss of credibility of the single currency, the breakdown of the European integration model, and the flight of the "Cradle of Democracy", to name just a few. Their Greek counterparts, on the other hand, must decide how far they are willing to respect their commitments or, if they want to go back on them, how they intend to do so.

As for their exit from the eurozone, it seems not to be an option either for them or for most of their constituents. And it is precisely because the political and economic costs of a “Grexit” would be too high for both the Greeks and their partners that it is reasonable to bet on a “softer” outcome, which ought to be emerge following the June 17 parliamentary elections in Greece and France. 

Europeans will probably end up accepting a new restructuring and debt rescheduling for Greece, which will give a breather to a population tested by two years of severe austerity. Likely to be governed by an unprecedented majority and monitored closely by the EU-ECB-IMF “troika”, the Greeks will be forced to reform a state that has proved unjust and inefficient and to stop exploiting the crisis, the consequences of which are plain to all.

Today, in the aftermath of elections that have demonstrated the strength of those opposed to austerity policies demanded by the EU and the IMF and the steep decline in support for the major traditional parties in the country, a Grexit is more than just a rhetorical threat, but a real hypothesis – and one which could definitively materialise in the re-run of elections scheduled for 17 June.

But should we be convinced that a Grexit is the solution? The economists and politicians who have weighed the pros and cons of such a move have failed to provide a convincing case for a Eurozone either with or without Greece. Rather, as Il Sole-24 Ore has noted, the current debate resembles a bluff – and a particularly dangerous bluff for all involved.

Europeans are faced with an impossible choice. A decision to expel Greece from the Eurozone, in a procedure not covered by any European treaty, could result in a loss of confidence in the entire European economic system and undermine the credibility of the EU both as a political project and as world power. At the same time, a drive to maintain the status quo will not only perpetuate policies that are destroying Greece’s social fabric and weaken the cause of democracy in a country that was –  as we never tire of saying –  its birthplace, but it will also expose Europe to the risk of spending billions of euros for nothing, because the Greek state is now to all intents and purposes a fiction.

In response to a dilemma which has emerged over the fate of a country that accounts for less than 3% of its GDP, Europe has been unable to provide an effective solution. Instead it has been caught in a deadlock arising from its own equivocal status: it is too integrated, both economically and politically, not to be endangered by the Greek crisis, but not sufficiently integrated to provide itself with the means it needs to overcome such an obstacle. Without the single currency and without the single market, it would have been easier to allow the Greeks to default and devalue their currency. At the same time, with the mechanisms for increased coordination of budgetary policies and measures that allow for the imposition of reforms in Greece, particularly with regard to the collection of taxes and the fight against corruption, Europe may be able to push the country towards recovery.

But how can we say to the people of Europe that the solution to the current crisis is more Europe? EU leaders are now paying the bill for more than two decades (from the 1986 Single European Act to the 2009 Lisbon Treaty) of accelerated progress on a road to European integration paved with promises of prosperity which has consistently avoided the issue of democracy in the Union.

Now that the wear and tear on Europe’s institutions has been compounded by the debt crisis, the European project has been caught like a Minotaur lost in a labyrinth, where it is vainly seeking a way out. Or should we say… a “Grexit”?

“After the vote, the country is in the red”, worries I Kathimerini. The daily further notes that even if support is growing for Greece to abandon the single currency, “Merkel and Hollande want Greece to remain in the eurozone.”

“International alarmists' forecasts have come true” laments To Ethnos headlining with “Elections in a minefield”. "The country has reached an impasse. The parties now need to present clear solutions to the country’s problems,” among which are recession at 6.2% in the first quarter and unemployment at 21%.

For To Vima, the new elections will be –

a referendum with Antonis [Samaras, the leader of New Democracy, right-wing] against Alexis [Tsipras, the leader of Syriza, the Coalition of the radical Left], the right against the Coalition of the radical Left, the pro-Europeans against the rest.

However, Ta Nea hopes that this political crisis –

will be a chance to revive and restructure Greece’s social democracy. The two traditional parties [New Democracy and the socialists of Pasok] should draw some lessons from their failure.

Spanish and Italian 10-year borrowing costs shot up to their highest levels this year, whilst German 10-year bonds yields hit a record low, exacerbating the differences in borrowing costs between European countries to a new high. European stock markets also suffered their largest one-day drop in three weeks.

Aggravating these problems, Moody’s downgraded 26 Italian financial institutions by one to four notches, on Monday night and the cost of insuring against Spanish default hit a record high.

The financial firewall – the European Stability Mechanism – is a  500bn rescue system set up by European leaders. Some analysts are questioning whether this will be sufficient to rescue the larger economies at risk, such as Spain and Italy. Luke Spajic, a senior fund manager at Pimco bond investors told the Financial Times –

It’s looking alarming right now. The market is effectively trying to price a disorderly exit for Greece.

The FT added that calls were mounting for decisive action from European policy makers to avoid more systemically important countries being "dragged down by concerns over Greece."

Echoing German concerns about the ability of the Greek political parties to form a government after the elections on May 6, Der Spiegel explains that "for Berlin, the situation in Greece is reminiscent of the Weimar Republic" and evokes the spectre of the regime that emerged in Germany after the First World War. With its stability undermined, it became a breeding ground for Nazism-

The so-called “shame'”of the Germans at [the conditions imposed by the] Versailles Peace Treaty seems to the Greeks to be echoed in the objectives of the financial recovery conditions demanded by Brussels. As in 1920s Germany, it is the extremist parties who benefit.

While it would be desirable for Greece to leave the euro zone, Der Spiegel notes,

Nobody can force the Greeks to leave the euro. But it is clear that it would be in their own interest. ...The exit of Greece from the euro zone is the only chance for the country to recover. The Greeks would have their own currency, that they could devalue. This would mean imports would be more expensive and exports would be cheaper ... Solidarity between European countries is not tied to membership of the euro, and this is why other countries must help Greece with its huge debts.

The weekly puts forward another argument: The departure of Greece from the monetary union "would be a strong signal to other bankrupt countries: you don’t blackmail Europe".

However, this schedule may be disturbed by the result of another 6 May vote, the general elections in Greece. Whereas Nicolas Sarkozy’s defeat can in part be explained by the “curse” that currently weighs on outgoing leaders in Europe – in the last two years, only Poland’s Donald Tusk has succeeded in winning an election – Sunday’s Greek vote has all the trappings of a revolt against the country’s political system. Thus the result is particularly bad news for the EU and the IMF, which, in spite of its faults and responsibility for the current crisis, depend on this political system to implement the economic and restructuring measures demanded of Greece in exchange for financial aid.

At first glance, François Hollande’s victory could be a godsend for PASOK or New Democracy, both of whom need to demonstrate that they can exert some influence over demands made by the troika. But with barely a third of the vote between them, and a combined total of just 152 seats in a parliament where a majority requires 151, in all likelihood they will be unable to form a coalition in the event that they decide to do so. On this basis, it is hard to see how they can derive any advantage from the impact of Hollande’s election.

Now that PASOK, which won elections in 2009, has been relegated to third place by the radical left, and in view of the fact that power in any future parliament will be fragmented among small parties, including the neo-Nazi Golden Dawn, the most likely outcome of the 6 May vote will be yet another election, and one that can only add to the ongoing uncertainty in Europe.

Fears over respect for the conditions of the bailout supervised by the troika and Greece’s future in the Eurozone were immediately apparent on financial markets in the aftermath of the election. In Berlin, the Chancellor’s office was quick to point out that there was no possibility of renegotiating the budgetary pact signed in March. So if there is a debate on growth, it will be one that is conducted in a difficult context. And the French socialist joy expressed in yesterday’s celebration at the Bastille may be short-lived.

Nicolas Sarkozy is the 11th European leader to fall since the banking crisis broke, and this result is more than just a shot across the bows for the former Sarkozy loyalists in Ms Merkel or David Cameron. France's new direction is a mortal blow to the austerity compact which has been Europe's anchor response to the crisis.

"Frau Merkel, I have arrived", leads Frankfurt daily, Frankfurter Rundschau. Following his speech, the president-elect announced that his first foreign visit would be to the German Chancellor, who is expected to accommodate this new partner despite their ideological differences:

Merkel would not be Merkel if she were not capable of quickly changing course. She has no ideological problems with the Social Democrats [with whom she governed from 2005 to 2009], even if they do call themselves socialists. Hollande will not proclaim a revolution. He must learn to adapt, as Merkel did during the Greek crisis.

"Hollande wins, the challenge for Europe begins", leads Milan daily, Corriere della Sera which calls the new French president “an ordinary leader for extraordinary times".

The message from this month of May in France, in these times of crisis, of the decline of the citizen and a rise in mistrust of politics, is full of hope. For France and for the Europe that is looking to France. [... It] is also a defensive choice, to resist a Europe of sacrifices without fairness, and rigour without growth. [...] France under Hollande no longer dreams of socialism in one country, but a little more of social democracy in Europe.

For El Mundo, "Hollande's victory opens up uncertainty in Europe". The conservative daily is worried about the shape of the "new era" opening up "for France and for the rest of the continent."

Never has a presidential election in France had such repercussions across Europe. [...] The socialist candidate’s victory breaks the hegemony of the centre-right of the last decade and kindles doubts over the cohabitation with Chancellor Angela Merkel, with whom [outgoing president Nicolas] Sarkozy pushed for fiscal union and the austerity policies [...].

"A fresh start for Europe," writes De  Morgen. The paper, however, believes "the socialist Hollande (is) on a collision course with Germany over the austerity question." In an editorial the paper adds:

The question of whether Hollande can pull off this turnabout in Europe [towards growth measures], remains wide open. We are already looking forward to his first trip to Berlin, where he is to conclude a historic compromise with an unbending Merkel. These discussions will take place in a heated climate, following the parliamentary elections that fractured the political landscape in Greece yesterday.... Europe has got a little redder since yesterday. [...] At the same time, though, the storm clouds over the continent have darkened.

In Stockholm, Dagens Nyheter notes that, while the new president has chosen a more tolerant and open path on immigration and minorities than that of Nicolas Sarkozy, “ he does raise troubling questions on economic policy:

If Hollande does break the fiscal pact, it will cause serious problems. Europe needs growth, but without an effective brake on big budget deficits among the member states the euro will struggle to survive. This would undermine the monetary union and (the member states’) ability to make joint decisions. It seems unlikely therefore that Hollande is serious about renegotiating the pact. More likely is that he will be content to add an innocuous passage on the importance of growth.

Writing in the Prague daily Hospodářské noviny, editorialist Martin Ehl believes that "another Europe" has emerged from this "weekend election." The presidential elections in France and the legislative elections in Greece reveal that the Old Continent is facing "a new French revolution". This shakes up the consensus on European integration, which is going through its deepest crisis since the 1950s:

Europeans expect more from their leaders than (blunt) cuts with the knife. [...] Following the fiscal pact, Europe will need to think innovatively on the economic front.

For years, Athens posted budget deficits below their real level due to falsified statistics. European Commissioner for Taxation and Customs Union, Algirdas Šemeta, suggests revising national statistics to make them more credible. He also suggests that national statistics agencies should be independent and that their heads should be appointed on criteria other than political. According to the paper -

They will have to decide independently as concerns the development, the production and the dissemination of the statistics as well as the management of the work of the statistics agencies.

Each member state will have to adopt, "at the highest political level," a European Statistics Code of Practices, Adevărul explains. This document will be countersigned by the Commission and Eurostat will be responsible for making sure the commitments are respected. The demand for reliable, credible, evidence-based data is growing, in particular because of the need to coordinate economic policies in the EU.

The French presidential election could result in a renegotiation of the budgetary pact, pledged by socialist candidate François Hollande, or a review of Schengen, demanded by outgoing President Nicolas Sarkozy, who has threatened to suspend the application of the agreement. The identity of the winner will also affect Franco-German relations, links between the European left and right, and the balance of power between small and large EU states.

In Serbia, President Boris Tadić is taking advantage of general elections to seek a renewed mandate that would give him a free hand to pursue pro-European policies. If he is re-elected with a majority in parliament, he will benefit from an unassailable position from which to lead his country in the footsteps of neighbouring Croatia towards an EU accession that will boost the stability of the Western Balkans. Thereafter his discreet policy of relinquishing Serbian claims on Kosovo, a condition imposed by Europe, could become irreversible, even though it may still be undermined by an upsurge in tensions in the former Yugoslav province.

As for the elections in Greece, they will represent an opportunity for the country’s population to express its view of the policies that have been implemented since the start of the crisis which has threatened to destroy the country. No doubt lenders and financial markets will be hoping for an outcome that favours the PASOK socialist party and/or the right-wing New Democracy. But the moment of truth may be fast approaching for both of these parties, which spent months locked in dispute before coming together to form a national unity government under Lucas Papademos. As it stands, both have been performing badly in the polls, with showings of less than 20%, and they will both have to contend with competition from dissident and extremist parties, opposed to austerity policies and the restoration of order in the country’s finances imposed by the EU and the IMF.

Opposition to mainstream politics, which will likely be a common feature of these three different elections in what is arguably a representative sample of European countries – one still a prosperous founder member of the EU, one peripheral EU state that is currently in crisis, and one country on the road to accession – should constitute an interesting barometer of the situation in the rest of Europe.

In France, the competition for third place behind Hollande and Sarkozy will be between the extreme right representative, Marine Le Pen, who wants out of the euro, and Jean-Luc Mélenchon, the leader of alliance of left- and far-left parties, who wants to “liberate” France from the Lisbon Treaty. In Greece, the anti-European protest vote will be disputed by the borderline neo-nazi Golden Dawn, and the right-wing populist LAOS party, which briefly participated in the Papademos government, as well as the hard left represented by the KKE communist party, the SYRIZA (radical left) and DIMAR (democratic left). At the same time, nationalists continue to exert a strong influence in Serbia, where their support remains an important factor in the success of the Serbian Progressive Party led by Tomislav Nikolić, which is currently topping the polls in the run-up to general elections.

Notwithstanding the important role that markets in Madrid, Milan and elsewhere will play in determining the fate of the common currency, the cross-section of electoral opinion offered by 6 May will enable us obtain a better understanding of what the future holds for European politics in the months to come.

The message sent to the nation by Lucas Papademos was expected in recent weeks. The May 6th date is not a surprise but the stakes will be decisive.

According to the latest opinion polls, the right-wing New Democracy Party is the frontrunner. But with voting intentions hovering between 13% and 20%, it would be forced to form an alliance with the socialist PASOK or other smaller parties.

Athens daily Ta Nea writes –

We must decide if we will vote reasonably or if we prefer political chaos. All the polling institutes agree that a coalition government will have to be formed because no party will have a sufficient majority to govern. The populist parties are rising in the polls, riding on an anti-austerity wave and Europe is watching us. This time, there is no place for campaign promises and political instability, a result of an exhausted two-party system, is a reality.

Ta Nea, however, recuses all political co-opting and publishes a front page cartoon with a man in the process of killing himself accompanied by the following dialogue:

"I can't stand it!"

"What can't you stand, Gramps?"

"To see what you will say on what I am about to do!"

For his part, the leader writer of daily To Ethnos, Georges Delastik, says that the man –

was not mad. He took his life in order to have a decent end and to not sink into starvation. It is not a suicide, it is a murder. He explains this in a letter describing the dictatorship imposed on his country which slaughtered him. Today, pensioners are forced to beg or to hunt through garbage pails.