Will Greek elections decide future of Greece and EU itself?

Whether the Greeks elect left-wing Alexis Tsipras or a moderate committed to austerity will decide not just the future of Greece within the eurozone but the EU itself.

This Sunday, the Greeks will go to vote again after failing to elect a government in May. The Greeks want to stay in the Euro, but feel harsh austerity measures are driving the country into poverty, and hence want these fiscal discipline targets to be renegotiated.

They might elect the young, dynamic, left-wing Alexis Tsipras, who has sworn to do that as well as to reform Greece's corrupt public sector and tax regime. If he wins, either Germany and the EU back down and support Greece, or they let Greece exit the Euro, risking contagion across the region.

Contrarily, the Greeks may elect either of the two moderate parties committed to meeting the EU fiscal discipline targets. In that case the eurozone crisis can be averted for now.

At stake is not just the future of Greece within the eurozone, but the European Union itself.

Despite a massive injection of €100 billion into Spain's stressed banks over the weekend, Spanish 10-year borrowing costs rose to a historic high of 7%, Italy's borrowing costs spiked, and markets remained sceptical about the EU being able to firewall or contain the fallout of a Grexit.

The Cancun G20 meeting, which starts on Monday, is likely to be dominated by European tensions. The debate will fracture along austerity versus growth lines.

Germany, which is the only country with financial clout to contribute to weaker economies, has repeatedly rejected “miracle solutions” like joint Eurobonds, and is stubbornly dedicated to the Herculean task of achieving fiscal and political union in Europe, with stringent fiscal discipline rules.

On the other camp are the US, France, the European Central Bank, Italy and Spain, who believe German policies fuel depression, and are looking for Keynesian stimulants to spur economic growth.

They want Europe to first show global markets the firepower and will to save the Euro, by allowing joint bonds or more powers to the ECB, then spur growth with investments, and then look to fiscal stability for the future.