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.