After five years of harsh austerity measures that conditioned Greece's rescue by the so-called Troika of lenders (the International Monetary Fund, the EU and the European Central Bank), a new government is coming to office, promising to roll back the austerity programme.

Syriza, the radical-left coalition, with 35.32 percent of the vote, triumphed but came just short of being able to form a majority government. An unholy partnership with the right-wing Independent Greeks party (4.68 percent of the vote) ensures that a stable coalition government is formed, on a shared anti-austerity platform, despite the two parties' disagreements in other areas, particularly immigration policy.

The success of the anti-austerity camp represents the first major challenge to austerity politics across Europe. It will likely boost support for left-wing parties, such as Podemos in Spain and the Five Star Movement in Italy, as well as some right-wing parties, including Ukip and the National Front in France, that will also seek to capitalise on the unfolding political shifts. Markets have predictably responded nervously, with the euro briefly recording an 11-year low against the dollar, while political reactions across Europe varied from enthusiasm to outright panic about the future of the Eurozone.

Syriza's victory can be attributed to economic and political factors. It is driven by a conviction that fiscal contraction in an already stagnant economy leads to a worsening of outcomes, adding a burden to the real economy and fuelling a vicious cycle of negative growth. Since 2008, there has been a dramatic increase in poverty and inequality in Greece, especially across gender, age and class lines. Unemployment has risen from 7.7 per cent to more than 25 per cent and the Greek economy has, in real terms, contracted by one quarter, indicating a recession globally unprecedented in peacetime. The country's sovereign debt, at 175 per cent of GDP, remains unsustainable, according to Syriza, and the Troika's plan for repayment is based upon wildly optimistic and unrealistic expectations, given the depth of the recession and other implementation obstacles.

Syriza calls for a renegotiation of the rescue package and for a partial write-off of the Greek sovereign debt to allow the economy to restart and the state to be reformed. The international lenders reject any discussion of the latter and are somewhat ambiguous about the former. Something needs to give.

Both sides agree on the urgent need to overcome mutual distrust and reach mutually beneficial agreements. Mishaps and miscalculations from either could result in an accident that could see Greece defaulting on its debt and exiting the single currency.

The cost of that for Greeks is incalculable. For the Eurozone, a range of new financial mechanisms and institutions introduced in recent years means that it is better prepared to manage a possible "Grexit" but the risk of contagion remains. Market speculators would smell blood and target other "rehabilitated" economies such as Portugal, Italy, Spain or Ireland, with unpredictable consequences. With the stakes so high, the most likely scenario is pragmatism and realism prevailing. Both sides will have to make some concessions, even symbolic ones, to avert a further escalation of the crisis.

To prevent losing political capital, Prime Minister Alexis Tsipras and Syriza cannot be seen to make a complete U-turn on anti-austerity pledges. Similarly, to avoid setting a bad precedent and undermining their leadership, the Troika, or rather Germany, cannot be seen to be succumb to Greek blackmail. When there is a will, there is a way for both conditions to be satisfied. Another key consequence of the Greek election is that the dogma of "there is no alternative", while exceptionally persuasive, has its limits. The election in Greece came down to a contest between fear of looming dangers and hope for a better future. Despite the uncertainties and risks a Syriza government brings, an electorate suffering from austerity fatigue was ready to take a step into the unknown. Its hope is that this will not mean a return of false prophets and missed opportunities for substantial change in Greece and Europe, as both look forward to a long period of retrenchment before they can confidently move beyond the crisis.