GREXIT: The Real Possibility of Greece Exiting the Eurozone in light of the Legislative Elections
In May 2012, the financial crisis in Greece and the impossibility of forming a new government after elections led to strong speculation that Greece would have to leave the Eurozone shortly.
This phenomenon had already become known as “Grexit" and started to govern international market behaviour. It is a portmanteau combining the words Greece and exit, referring to the possibility that Greece could have to leave the Eurozone, and thus would have to readopt their old currency, the Drachma. But such a drastic move could not be contemplated before the results of the Greek Legislative Elections came to light.
A legislative election was pre-emptively held on 6 May 2012 in Greece, to elect all 300 members to the Hellenic Parliament, instead of 2013, as scheduled, due to a response to form a coalition government, formed with an intention to ratify and implement decisions taken with other Eurozone countries and the I.M.F.
ND, the major right-wing party, won 108 seats, representing a 19% majority of the vote, an all-time low, reflecting the people’s opposition to austerity. PASOK, the ruling left-wing party lost the majority of its seats gained in 2009, in light of its economic policies leading up to the crisis. However, no party was able to gain a clear majority for the right to process a coalition government. Talks between ND, PASOK, and SYRIZA, the lone pro-exit coalition party,