Greece's massive debt restructuring in 2012 changed the profile of Greek debt, which is now mostly in the hands of the European Financial Stability Facility, the European Central Bank and national governments. Any new cut to Greece's debt would particularly hurt the European Central Bank and EU members. But though most eurozone members worry about Greece's declining commitment to economic reform in 2015, they will continue to help Greek Prime Minister Antonis Samaras' government out of fear that it could be replaced by a more confrontational administration.
Debt will remain a key problem for the Mediterranean nation regardless of the political situation there. According to the International Monetary Fund, Greece will have to permanently maintain a primary surplus above 4 percent of gross domestic product while growing at around 3 percent every year to take its debt from 174 percent of GDP in 2014 to about 128 percent in 2020. But Athens is quite far from this target: This year, the IMF calculated Greece's primary surplus to be at around 1.5 percent, and the Greek economy was forecast to grow by 0.6 percent.
Although this is certainly an improvement in Greece's macroeconomic situation, it has come at a high political and social cost. A growing number of Greek voters are demanding a change in direction. The rise of the Coalition of the Radical Left (commonly known as the Syriza party), which advocates renegotiating Greece's debt, has already led to the end of Greece's traditional two-party system, where the center-left and the center-right used to take turns in power. In 2012, it took two parliamentary elections to keep the left-wing party from accessing power.
As a result, any Greek government will have to deal with the question of whether to follow the troika's recommendations (and permanently deal with social unrest and political instability), or to push for a softer fiscal policy (and create frictions with the European Union and uncertainty in financial markets). The prospect of a renegotiation of Greek debt will not disappear and will continue creating uncertainty across the eurozone.
