article: So I start 2015 wondering why I feel five years older, since nothing much seems to have changed around me: there appears to be a general election looming here and something of a financial calamity brewing in Greece and in the euro area. Here is what strikes me: the eurozone is both stronger and sicker than in 2010. How so? Well, the eurozone is stronger in that it has put in place financial buffers to absorb the losses that would be generated if Greece were to unilaterally renege on its debts, and even be forced out of the eurozone - which could happen if Syriza wins the 25 January elections (though the language of the left wing party has become less aggressive towards the euro). It would be hugely damaging to economic confidence if there were a further Greek debt default. But this time there would not be a domino effect of collapsing banks and collapsing economies: losses on official loans to Greece would be shared in an orderly way between eurozone governments, banks are better capitalised than they were, and there is a more effective system in place to scrutinise and protect them (the limited "banking union" established last year). As for the other eurozone governments that were massively financially overstretched, Portugal, Ireland, Spain, and Cyprus, they are not the basket cases they were. They would not be abandoned by their creditors if Greece went pop. But the eurozone is also fundamentally sicker than it was in 2010 - in that it has proved itself unable to grow and recover, even when the US and the UK have been enjoying significant and sustained economic expansion. There is little growth anywhere in the eurozone, unemployment remains stubbornly high and has been edging up (and is not far off twice the UK rate), and inflation is widely seen as dangerously low - in the sense that it could turn into the kind of deflation that would discourage businesses and households from spending (why spend today when things will be cheaper tomorrow?). In other words the euro is not seen to be working for the people of the eurozone. That said, the euro area is a huge consumer of oil, so the tumbling oil price should put money into the pockets of consumers and companies. But if they are feeling glum, which they seem to be, they may hoard it - which would not be a fat lot of good. The other related sense in which the eurozone is much weaker than it was is that anti-euro and anti-EU political parties are gaining enormous popular support all over the region. Where that currently matters most is in France and Spain, where the Front National from the right and Podemos from the left are respectively posing existential challenges to the political establishment. Or to put it another way, Greece will not be the last eurozone country where a party hostile to the tenets of the great European project will be seen as on the cusp of power. So politics, rather than economics, is now what
summary: The 2010 general election was fought under the dark shadow of a financial crisis in Greece that was infecting the eurozone - and was bound to damage the UK's economy.