There's a lot of talk these days about the upcoming re-run of the elections in Greece. The general tenor of the discussion (here's a good example from today's Reuters feed) is that Greece stands on a knife's edge. If the anti-bailout parties win the election, Greece will exit the Euro and chaos will ensue. If the pro-bailout parties win, the deal they struck with the rest of Europe will be saved, Greece will remain in the Euro, and all will be well.
Given how close the vote is likely to be, that's a lot of outcome to attribute to a small fraction of the population. If the winning margin between pro- and anti- forces is 1%, does the fate of the whole country hinge on that 1%? I don't think so - at least, not in this case.
The problem, at heart, is not what the Greek government will do. The problem is what the Greek people will do. In this case, the population is clearly evenly split - about half are virulently opposed to the European bailout (and, in particular, to the austerity measures that go with it), while the other half are willing to put up with austerity if it means they get bailed out and stay in the Euro zone.
Let's say that the pro-bailout forces (New Democracy and Pasok) win by the slimmest of margins, and manage to put together a bare-majority government (the best they can possibly hope for). What will the other 49.9% of the population who voted against austerity do?
Given that many of them regard the European-imposed austerity measures as externally imposed and wholly illegitimate, they will resist. Some will demonstrate, even riot, damaging economic activity and lowering government tax revenues. Some will yank their money out of Greek banks, further weakening an already under-capitalized banking sector. Some will go on strike - more economic slowdown, fewer taxes. And some will simply refuse to pay their taxes, further lowering government revenue and increasing the cost to the government of collecting the revenue it gets.
All in all, the anti-bailout/anti-austerity part of the population is likely to do all sorts of things that will serious damage Greece's government finances. This will likely put Greece in default of its obligations under the bailout agreements, forcing Europe to either give them the money anyway (unlikely, given the mood of the German public) or cancel the bailout (which is what Syriza and the anti-bailout forces want).
So the problem here is not the elections. The problem is that there is a large enough bloc of the Greek population - whether it is 49% or 51% is immaterial - that can effectively veto Greece's side of the bargain. Given the level of political feeling in Greece right now, it is unlikely that a New Democracy-led government will be able to bring any significant number of these people around to cooperate with the Germany-funded austerity plan.
Greece is likely to be a laboratory over the next few months for an important principle of democracy: elections are a way of measuring the "will of the people", but they are not the only way. The people still retain their right to direct action, and they will exercise it. Elections are just a tool - and a subordinate one at that. It will be interesting to see what the birthplace of democracy does, and whether a deal that requires the cooperation of more Greeks than are willing to cooperate stands any real chance of success.