By Andrew Rosenbaum

 ATHENS

"Greece leaves behind the austerity of destruction," were practically the first words out of Syriza leader Alexis Tsipras' mouth once victory in the Greek election Sunday was assured.

"Greece is turning a page, it’s leaving behind five years of humiliation and misery. We are putting together a government of social deliverance to carry out our program and negotiate with Europe," he declared.

Syriza won 36.3 percent of the vote, while the ruling coalition saw only 27.8 percent, giving Syriza with a projected 149 seats in the 300-seat parliament -- two short of an absolute majority needed to form a single-party government.

The far-right Golden Dawn party was third with 6.3 percent, and the center-left River fourth with 6.1 per cent.

Syriza has already formed a governing coalition, one that poses a grave challenge to the European Central Bank and the European Monetary System.

Dangerous challenge

"Europe needs to prepare to accept that Greece’s five long years of austerity will shepherd into power a radical, Populist Party with no prior governing experience," warned Brookings Institution political analyst Daniel V. Speckhard in a note published Thursday.

Syriza will pose a dangerous challenge to the European Union, he added.

A discussion on existing bailout measures will delay Greece’s access to loans it badly needs.

The major banks risk a €2 billion ($2.24 billion) shortfall without an injection of funds from the bailout, and the government won’t be able to pay civil servants’ salaries within a few months of a bailout breakdown, according to credit agency Fitch Ratings.

Further, a default on debt could create a run of capital out of the Euro-zone, as investors lose confidence in the single monetary system.

"A Greek default would shake the Eurozone," said Christian Schulz, an analyst at Berenberg bank in a note released Monday.

High stakes

About two percent of all bank deposits have already been pulled out of the country by investors just ahead of the elections, according to Fitch.

Many long-suffering Greek taxpayers actually stopped paying taxes in December, ahead of an expected Syriza victory that would bring them an amnesty, the Financial Times reported Thursday.

Receipts dropped €1.5 billion, the report said.

Yet the program of a new government headed by Syriza is certain to include demands to Greece’s creditors to either restructure, or write off part of the country’s outstanding €348 billion ($391.1 billion) in public debt.

The stakes are highest for Germany.

A "haircut” on the Greek debt would cost Germany about $40 billion, according to economist Timo Wollmershäuser from the Ifo Institute for Economic Research in a note published Monday.

Stern warnings

So it is not surprising that Germany has already issued stern warnings to Greece about the dangers of rocking the boat.

German Finance Minister Wolfgang Schaeuble said in a speech at the World Economic Forum on Friday that “Greece must undertake strong efforts to remain competitive. Reforms must continue as planned, if Greece intends to get the benefit of the European Central Bank’s stimulus program."

International Monetary Fund Managing Director Christine Lagarde issued a similar warning last Wednesday: "A debt is a debt and it is a contract.

"Defaulting, restructuring, or changing the terms has consequences on the signature and the confidence in the signature," Lagarde stated in an interview with the Irish Times.

The IMF, along with the European Central Bank and the European Union constitute the "Troika" which holds Greek public debt.

The Troika wants to see further austerity measures pushed through by the Greek government.

Jobs lost

As far as the Troika is concerned, the Greek government should be discussing further cuts in public sector employment and reduced pensions.

More than 30,000 Greek public sector workers have already lost their jobs as a result of austerity measures, and the Troika has asked for 11,400 more in March 2014, according to the most recent IMF report on the country released in May 2014.

But Syriza is on a different planet, as far as the Troika is concerned.

"We need to renegotiate the logic," said Professor Yanis Varoufakis, a Syriza economist and candidate for a seat in parliament, speaking to the Wall Street Journal on Jan. 23.

"The Syriza economic plan is rooted in the core principles of debt forgiveness and higher government spending, which Germany has rejected," Varoufakis said.

While not explicitly considering a default, the Syriza economist does not rule it out.

"Our objectives," he said, "are humanitarian -- there has been too much suffering."

'Archons of austerity'

For some economists, Syriza has a point.

"The thing that strikes me about Europe’s archons of austerity, its doyens of deflation, is their self-indulgence," writes laureate economist Paul Krugman in a recent column.

"They felt comfortable, emotionally and politically, demanding sacrifice (from other people) at a time when the world needed more spending. They were all too eager to ignore the evidence that they were wrong."

But it is too late to decry the Troika’s mistakes.

Greece and the authorities of international finance are headed for a brutal confrontation.

It can only be hoped that the rest of the world does not suffer the effects as well.