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The far-left anti-austerity Syriza Party has agreed to a coalition deal with the Independent Greeks giving the Syriza Party a majority and thus power in Greece.

Greece had slipped into near bankruptcy primarily because of widespread tax evasion and corruption. The "brutal austerity" imposed on Greece as a condition of $273 billion in Eurozone bailouts since 2010 has actually been working slowly but surely. The economy has been growing and unemployment is down.

On January 26, the Eurogroup began discussing an extension to Greece’s bailout -- which expires on February 28 -- but the Greek government must formally ask for an extension. However, on January 30, Greece's new Finance Minister Yanis Varoufakis said that Greece's government will not cooperate with the European Union and the International Monetary Fund mission bankrolling the country and will not seek an extension to the bailout program. This sets up a confrontation between the Eurozone and Greece. 

True austerity has been hard on the average citizen slashing household incomes by a third. The election of the Syriza Party was an expected reaction. But what will the Syriza Party do? There has been growing support within the party for an "orderly default" or "grexit" on Greece’s public debt, which would allow the country to withdraw simultaneously from the Eurozone and reintroduce a national currency, such as its historical drachma at a debased rate. However, should Greece take this route, the debts don't just go away. Many pundits argue that grexit would probably lead to isolation from world markets, collapse of its banking system, exploding inflation, and eventually another default. After years of recession and reforms, it would be a sad sight for Greece to follow this course.  

If Greece does ask for an extension of the bailout or tries to renegotiate, the Eurogroup would probably require more austerity. 

Greece and the Syriza Party are at a crossroads -- short term populism or stay the austerity course.