The Athens result brings the austerity debate to a close – but not in a good way

‘Greeks choose austerity over chaos,’ said a typical headline on Monday morning. But in truth the argument for austerity is pretty much lost, and we might as well move on to the argument about inequality — and related arguments about volatility, more of which below.

While anti-austerity socialists secured a majority in the French parliament, the pro-austerity New Democracy party limped home in the re-run Greek general election — but with less than 30 per cent of the poll. The coalition that these centre-rightists will try to lead is likely to win a bouquet of extra EU ‘growth’ funding and more time to pay debts, as a reward for saving the euro from the collapse that would surely have followed if the leftwingers who came second, Syriza, had bagged another 200,000 votes. Despite an 11 per cent swing to New Democracy, ‘austerity’ will now, I predict, gradually fade out of the Greek political lexicon.

That’s not to say austerity itself has suddenly become a bad concept, or that it isn’t having a useful impact, at least in terms of international creditworthiness, in Ireland, Italy and the UK. It’s just that when offered even the most unfulfillable promise of something less painful, few voters ever pick the harsher option. I know how isolated New Democracy leader Antonis Samaras must feel: in a recent Intelligence Squared online debate on the motion ‘Austerity is not the answer’, I took the role of pro-austerity advocate. Before the kick-off, only 4 per cent of the first 30,000 viewers to log on across Europe and America were voting my way.

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By the time we finished, the number who accepted my argument that austerity in this usage was merely a bleeding-hearts’ synonym for fiscal responsibility, frugal government and paying your taxes — strategies which have never been tried in the eurozone outside Germany — had soared to 17 per cent of 46,500.