This is a Cato Special Podcast. I'm Caleb Brown.

Greece is hoping that new elections will change the fortunes of their government,

but new elections likely won't change the underlying problem, overspending,

and a refusal to adopt real austerity.

Cato Institute Senior Fellow Dan Mitchell comments on the election and its aftermath.

What do Greeks hope people will believe about this new election?

They've supported a pro- bailout party which as I understand it

was a fairly narrow victory. Actually every party was pro- bailout the key

difference was that the the winning party was willing to abide by

some conditions, whereas this left-wing coalition, they wanted bailouts without having to do

anything, whether it was good things like cut spending or bad things like

raise taxes. They just wanted to business as usual that got Greece in trouble in the first place.

I think the big interpretation of the election results is

that Greeks mostly want to keep the euro. A lot of people say well they'll have to

go back to the old drachma but Greek citizens know that just means an inflationary

currency and that would mean a combination of bad fiscal policy and bad

monetary policy at least now with the euro they just have bad fiscal policy

has the euro then enabled a lot of this behavior by Greeks?

The euro, while it certainly is better than the drachma,

probably does bear some blame because it led to a period of very illusory low interest rates for some

of these periphery countries not only Greece but also Spain Italy Italy, Portugal, etc.

These countries should not have been borrowing at German type interest rates because they just

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