The Greek elections saved the world for about 48 minutes

Fundamental failings remain.

The half-life of a European success is getting shorter and shorter. Last week's bailout of Spain (euphamistically referred to by Prime Minister Mariano Rajoy as "what happened on Saturday") saved the world for 48 hours, with everyone thinking all was good at Saturday lunchtime and realising that it was still messed-up by Monday. The results of the Greek elections look to have saved the world for 48 minutes.

The headlines (mostly written before the election was even declared, to be fair) declare Europe to have survived "a close call" and been granted "a stay of execution" as "Greece gives Europe a chance", and this morning economics correspondents are still filing pieces claiming Greek result buys Europe time.

For a while it looked like they may have been right. Spanish 10 year yields opened at 6.84, before falling in the first few minutes of the day to 6.817. Italian yields also dropped slightly, and the country's main stock index, the FTSE MIB was up over 1 per cent over Friday's close.

But by 8:49, the MIB was down to where it had been on Friday, and is now 1 per cent down. And by 9:14, the Spanish 10 year yields had rocketed up, not just to where they were, but to a new high of 7.12 (chart via FT alphaville):

The problem is, as we wrote this morning, that the election of New Democracy does nothing to solve the underlying crisis in Greece – nor does it take Spain off the hook. Both countries are in the throes of a full-blown (though strangely slo-mo) banking crisis, and Greece is additionally suffering under an austerity program which is unlikely to be sustainable, either politically or economically, while its relationship with the European Union remains unchanged.

Except for the replacement of PASOK with SYRIZA in the Greek two-party system, the victory for ND represented a return to the status quo. And, regardless of your opinion of the possible replacement for it, the status quo was kind of crap.

A trader is sad about something. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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John Major's double warning for Theresa May

The former Tory Prime Minister broke his silence with a very loud rebuke. 

A month after the Prime Minister stood in Chatham House to set out plans for free trading, independent Britain, her predecessor John Major took the floor to puncture what he called "cheap rhetoric".

Standing to attention like a weather forecaster, the former Tory Prime Minister warned of political gales ahead that could break up the union, rattle Brexit negotiations and rot the bonds of trust between politicians and the public even further.

Major said that as he had been on the losing side of the referendum, he had kept silent since June:

“This evening I don't wish to argue that the European Union is perfect, plainly it isn't. Nor do I deny the economy has been more tranquil than expected since the decision to leave was taken. 

“But I do observe that we haven't yet left the European Union. And I watch with growing concern  that the British people have been led to expect a future that seems to be unreal and over-optimistic.”

A seasoned EU negotiator himself, he warned that achieving a trade deal within two years after triggering Article 50 was highly unlikely. Meanwhile, in foreign policy, a UK that abandoned the EU would have to become more dependent on an unpalatable Trumpian United States.

Like Tony Blair, another previous Prime Minister turned Brexit commentator, Major reminded the current occupant of No.10 that 48 per cent of the country voted Remain, and that opinion might “evolve” as the reality of Brexit became clear.

Unlike Blair, he did not call for a second referendum, stressing instead the role of Parliament. But neither did he rule it out.

That was the first warning. 

But it may be Major's second warning that turns out to be the most prescient. Major praised Theresa May's social policy, which he likened to his dream of a “classless society”. He focused his ire instead on those Brexiteers whose promises “are inflated beyond any reasonable expectation of delivery”. 

The Prime Minister understood this, he claimed, but at some point in the Brexit negotiations she will have to confront those who wish for total disengagement from Europe.

“Although today they be allies of the Prime Minister, the risk is tomorrow they may not,” he warned.

For these Brexiteers, the outcome of the Article 50 negotiations did not matter, he suggested, because they were already ideologically committed to an uncompromising version of free trade:

“Some of the most committed Brexit supporters wish to have a clean break and trade only under World Trade Organisation rules. This would include tariffs on goods with nothing to help services. This would not be a panacea for the UK  - it would be the worst possible outcome. 

“But to those who wish to see us go back to a deregulated low cost enterprise economy, it is an attractive option, and wholly consistent with their philosophy.”

There was, he argued, a choice to be made about the foundations of the economic model: “We cannot move to a radical enterprise economy without moving away from a welfare state. 

“Such a direction of policy, once understood by the public, would never command support.”

Major's view of Brexit seems to be a slow-motion car crash, but one where zealous free marketeers like Daniel Hannan are screaming “faster, faster”, on speaker phone. At the end of the day, it is the mainstream Tory party that will bear the brunt of the collision. 

Asked at the end of his speech whether he, like Margaret Thatcher during his premiership, was being a backseat driver, he cracked a smile. 

“I would have been very happy for Margaret to make one speech every eight months,” he said. As for today? No doubt Theresa May will be pleased to hear he is planning another speech on Scotland soon. 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.