The conservative New Democracy narrowly defeated SYRIZA in Greece’s general election yesterday.

New Democracy won 30 percent of the vote. SYRIZA came in a close second with 26.5 percent, winning popular support based on its criticisms of austerity measures set forth in the Memorandum signed with the Troika—the European Union (EU), International Monetary Fund (IMF) and European Central Bank (ECB).

This sets the stage for intense negotiations over the formation of a coalition government. Coalition talks have a 48-hour deadline, according to most observers. The EU is demanding that they affirm a commitment to key terms of the second Greek bailout, worth €130 billion, which have already meant devastating social cuts and wrecked the country’s economy.

Throughout the election, the EU threatened to cut off credit to Greece if it objected to the bailout terms. This would force Greece to either accept the collapse of its financial system or reintroduce a Greek national currency to fund its banks. Greek officials said last week that unless a delayed €1 billion tranche of troika funding is paid, they will run out of funds to pay pensions and public sector wages by July 20.

These efforts to blackmail the Greek working class did not prevent SYRIZA’s vote increasing substantially from the 16.7 percent won in Greece’s previous election, held last month.

It is mathematically possible for New Democracy (ND) to form a coalition government based simply on the pro-Memorandum parties. Party leader Antonis Samaras said Greeks had voted to stay in the euro and called for a “national salvation government.”

SYRIZA leader Alexis Tsipras agreed that ND should be the first to try to form a coalition.

The formation of an openly pro-Memorandum coalition faces significant obstacles, however. ND’s key ally in such a coalition—the social democratic PASOK, which won 12.5 percent of the vote—announced last night they would not join a coalition unless SYRIZA participated in it. The large SYRIZA vote and the general disaffection expressed in the low turnout convinced PASOK that it would be dangerous to proceed as if the pro-Memorandum parties had a mandate to rule.

PASOK proposed a national unity government of the four leading parties—also including the small Democratic Left, a right-wing split from SYRIZA. Its calculation was clear: a government that visibly defied the deep popular opposition to austerity in Greece by excluding SYRIZA would face mass opposition and be unable to govern effectively.

A failure to form a government would result in a third election and increase the likelihood of an expulsion of Greece from the euro zone.

New Democracy’s victory and its new chance to form a government are the result in the first place of naked intimidation by the European and international ruling elite.

In an interview Friday with Kathimerini, headlined “Europe is not bluffing on the exit,” Bundesbank President Jens Weidmann said: “There is a deal which all parties have signed including the Greek government… we must not allow any country to blackmail us with the consequences of contagion.” 

The interview was also run in other European newspapers, including Italy’s Corriere della Sera and Spain’s El Pais—as a threat to other countries facing a financial meltdown.

Eurogroup head Jean-Claude Juncker warned the same day in the Austrian newspaper Kurier, “If the radical left wins—which cannot be ruled out—the consequences for the currency union are unforeseeable.”

SYRIZA, a pro-capitalist formation committed to maintaining Greece’s position in the EU and the euro zone, was utterly incapable of combating these threats by appealing to opposition in the working class. Instead, despite its anti-austerity rhetoric, it did all it could during the election campaign to reassure the markets and Greece’s creditors of its good intentions.

MP and former deputy parliamentary speaker Tasos Kourakis told Athens News Friday that SYRIZA’s economics team “will talk about restraining expenditures and attracting new funds, like EU structural funds.” He foresaw “a restructuring and rationalisation of public administration.”

He urged an international audit of Greece’s debt, seeking to exclude only that part of the debt due to bribes to “Siemens, defence procurement kickbacks and such.” He said, “We will pay the rest.”

Making clear that there would be no nationalisations of either banks or companies, he added, “If you pay heed to our wording, we call for public control... you can have the management without being a majority stockholder.”

SYRIZA’s overtures to the EU appear so far to have had little impact on Europe’s hard line. However, the ruling elite are aware that as well as a worsening financial crisis engulfing the whole of Europe, they face the danger of an explosion of working class protests with revolutionary implications.

The Sydney Morning Herald was one of many publications which surmised that Greece will eventually be forced out of the euro, “whatever the poll result.” But it warned that whereas “Greece is almost ungovernable these days… the problem is wider than economics. Social unrest has the potential to spread like wildfire.”

Under these conditions, SYRIZA could still be brought in from the cold to play the role of subordinating the working class to the dictates of the troika—particularly if the troika made a few cosmetic modifications to the bailout terms. In or out of government, SYRIZA plays the role of disorienting the working class and confining opposition to a perspective that does not threaten the fundamental interests of Greek and European capitalism.

Last night, Tsipras struck a mildly oppositional pose, while acknowledging that New Democracy leader Antonis Samaras “has the possibility of forming a government on the basis of his mandate and policies.”

“We will be present in developments in a position of opposition,” he said, though this was posed from the standpoint of a loyal critic advising the ND on its policies: “The government, the New Democracy, must bear in mind great issues—it can’t carry on as it used to without talking to the people.”

The central issue is not to persuade the next government to “talk to the people.” Such a government will be committed to a policy of attacking the working class.

The Greek bourgeoisie will do everything possible and resort to any and all methods—including police-military repression—to force workers to bear the brunt of the economic catastrophe resulting from the bourgeoisie’s speculative practices. The European powers will insist on their pound of flesh, whether or not they move immediately towards a forced Greek exit from the euro zone.

Greek workers and youth have already suffered an historic decline in their living standards. They will be ruined, forced to work for a pittance and left to rot if they for one moment think that negotiations with the EU will bring them respite.

Everything now depends upon the independent political mobilisation on the basis of a socialist program of the working class in Greece and throughout Europe, in opposition to the ruling class, its governments and the institutions of the EU.