In an article published by The Wall Street Journal entitled “The Eurozone’s Problems are Based in Politics”, columnist Simon Nixon attributes the significant European markets decline last week to political risks.

In fact, he states that “this is most obviously the case in Greece,” although in economic terms the country “is now looking more stable than at any time since the start of the crisis.”

“While the debt-to-GDP ratio at 175% looks eye-wateringly high, Greece’s debt servicing costs and its debt maturity profile are among the most favorable in the eurozone,” says the report, adding that even the IMF now thinks there’s a chance Greece could hit its debt targets without further debt relief.

Nixon notes that what’s troubling the markets is Greece’s unstable political situation.”The radical populist party Syriza is leading the polls and threatening to trigger elections early next year by refusing to back any presidential candidate. Syriza leader Alexis Tsipras has been trying to present a more moderate image. The market fears a Syriza-led government would reverse the progress achieved under the current coalition,” explains the article.

Regarding the negative reaction of the markets last week, The WSJ states that the government’s strategy to expose Mr. Tsipras to the full glare of market scrutiny by attempting to negotiate an early exit from Greece’s bailout program partially backfired, “since the market reaction showed that investors aren’t ready to back Greece without a safety net.”

“It also demonstrated to Greeks, more than 20% of whom say they don’t know how they will vote, the risks of handing power to Syriza,” says the columnist.