It’s not one that they’re considering with any relish.

On the morning of March 20, continental Europe will lose up to 82%* of the sun’s light in the biggest solar eclipse since 1999 (see this cool video for tracing its path), posing a huge technical challenge to stop grids from blacking out. The problem is especially acute in Germany, where solar power is now a major part of the energy mix thanks to eye-popping government subsidies that have led to photo-voltaic panels being installed on pretty much every roof that can take them.

In Germany (as in most other countries in Europe) the power that those panels generate flows automatically into the grid. According to the four companies that run Germany’s network of high-voltage lines, if it’s a sunny morning on March 20, they will have to replace 12,000 megawatts of power–the equivalent of a dozen large power stations–within an hour. When the sun comes back out from behind the moon later in the morning, they’ll have an even bigger problem, as they will have to absorb up to 19,000 MW (because the sun will be stronger and the PV-panels will be pumping out more energy).

In a sort of “panic, don’t panic” message Monday by the European association of grid operators, ENTSO-E, the grid companies promised to be ultra-vigilant in coordinating their activities as the eclipse rolls across Europe, but warned that “managing this event on the world’s largest interconnected grid is an unprecedented challenge.”

When the last total eclipse happened in 1999, less than 0.1% of Europe’s power came from solar. But that’s risen to over 3% now. In Germany, even in miserable March, it satisfies around 7% of total consumption on an average working day, according to ENTSO-E figures.

Grid operators are used to big fluctuations in ‘load’ every day–demand surges in the morning as people get up and go to work, stays high throughout the working day, then tapers off to an absolute low throughout the evening and night. But such swings are predictable, and power companies generally know well in advance whether or not their plants will be needed and/or profitable at any given moment of the day.

But such calculations have gotten much more difficult with the rise of renewable energy sources such as sunlight and wind, whose output can fluctuate sharply and quickly. Ulrike Hoerchens, a spokeswoman for TenneT, the biggest grid operator in Germany, says they won’t know until two or three days before the eclipse how sunny it’s going to be and, consequently, how big the swing in generation will be.

All this makes the eclipse a landmark moment in the political debate over the development of renewables in Europe. Politicians have handed out massive subsidies to Green power to curry favor with environmentally-conscious voters, but have been less happy to allow grid operators the kind of tariffs that would allow them to upgrade their networks to cope with the burden of unpredictable generation.

Making a virtue out of necessity, ENTSO-E says it’s going to be a valuable learning opportunity: the share of renewables in Europe is only increasing, and the eclipse will provide a valuable ‘stress test’ whose outputs can be plugged into future investment calculations. They’ll need to. By the time of Europe’s next total eclipse in 2026, the amount of installed solar capacity in Germany is due to have risen by a third to around 55,000 MW (and it will happen in August, when PV output is likely to be much higher) .

On the bright side, Hoerchens says, it’s going to be a valuable learning experience. All the same, she’s hoping for some seriously bad weather, come March 20.

(*Footnote-the eclipse will actually be total in parts of Ireland and Scotland, but it’s not clear that that will greatly change the experience of an average March day in those parts.)

That explains why in Spain the prime business of Uber Technologies, best known for turning private cars into improvised taxis with its rider-driver matching app, is delivering salmon burgers.

"It's a lot of effort to build a platform for the collaborative economy. Once you've gotten the chicken-egg things solved, you've got to use it," says Sandra Sieber, an information systems professor at Barcelona's IESE Business School.

Uber has had a difficult time with European regulators in general. The company's Spanish squabble began last December, when a judge ordered the company to shutter its low-cost ride-share service, UberPop, because it did not comply with local laws.

At first, Uber looked to sign up more licensed car-service chauffeurs, like the kind who work for its UberBlack service in the U.S. But there are few such drivers in Spain's two largest cities, Madrid and Barcelona, and a service named Cabify was already working with many of them.

And so, last Thursday, Uber announced the launch of UberEats, a curated food delivery service that lets users order a limited number of plates at lunch or dinner (now, one each) for delivery within 10 minutes. Available in most of Barcelona, each plate from the dozen or so participating restaurants costs about EUR10; delivery is EUR2.50.

Uber's "burger pivot" isn't that strange, as the company is less a ride-selling company than a technology firm that puts unused delivery capacity to use. That's why investors valued Uber at $41 billion in its last funding round. They weren't looking for a piece of the world's largest gypsy cab service (even if it was in 250 cities); they wanted a share of a huge, multi-faceted logistics firm.

Indeed, as described by Pierre-Dimitri Gore-Coty, Uber's general manager for Western Europe, UberEats is as much about testing another logistics business as it is about food. "We're putting everything into pressing a button and getting food to you in minutes with a minimum of friction," he says. "We're all about bringing efficiency to market."

This is not the first time Uber has tested non-ride services. Last year, the company launched a New York bicycle messaging offering called UberRush and a blast-from-1999 Urbanfetch-like corner store delivery service in Washington D.C. called UberEssentials. And the Barcelona food delivery is modeled on UberFresh, a service launched last August that now includes 50 restaurants in Los Angeles.

For IESE's Sieber, UberEats is interesting because it is more complicated than delivering documents and the like--it has to comply with food safety rules like delivery temperatures, for example. If successful, it will help prove that Uber is up to dealing with difficult regulations. According to Uber's Gore-Coty, the delivery drivers are professionals with free time to take on more work, not amateurs looking for a quick buck.

"Once you start doing restaurant delivery and convince people you can deliver food hot, it will be very easy to deliver other packages," Sieber says. "Once I see this, when they ask me if I want to move other things, I will say, 'Yes.'"

In Spain, UberEats faces some competition. La Nevera Roja already allows users to order delivery online from more than 4,000 restaurants. But by concentrating on a limited menu (as curated by Plateselector) and promising to deliver within 10 minutes, Uber is offering a different product to appeal to impatient consumers who want a speedy, guaranteed service.

"We believe that by making the experience frictionless, by getting hot food there in 10 minutes, we can create a new market," says Gore-Coty.

UberEats is both a means to enter a new market and a way to keep Uber's name in the Spanish public eye after its ride service was shuttered. "They couldn't remain silent in Europe for more time," says Sieber. Whether food delivery can make up for the lost ride-share revenue is questionable, but that's not the end game.

As "collaborative economy" services like Uber and Airbnb expand, they will continue to face regulatory hurdles in places like Europe and China. So, to make use of their tech investments, they will have stay on their toes, adapt to regulations, and continue to pivot.

"It's all up to Merkel," says James Galbraith, who spent seven days in mid-February at Varoufakis' side in Brussels and Athens. "We've heard from her finance minister, who takes a negative stance, and from her vice chancellor, who wants to talk. The person we haven't heard from is Merkel. We know she does not talk until needed. They are as tough as possible, then make one concession at the last minute so they don't have to make two."

Galbraith summarizes Merkel's dilemma--and the best hope for an agreement--with one fundamental question: "Does Merkel want to be the person who presides over the fragmentation of the Eurozone?"

It's hard to imagine a more unlikely duo than Galbraith and Varoufakis. The former is the Harvard, Yale and Cambridge-educated son of legendary economist John Kenneth Galbraith. Varoufakis is a firebrand who sports leather trench coats and electric blue shirts at meetings with Europe's stuffy elites, and blasts off on motorcycles to unwind. Yet as colleagues at the University of Texas in Austin, they became not only great friends but intellectual soul mates, co-authoring (along with UK economist Stuart Holland) a 2013 treatise on resolving the Eurozone crisis that advocated for replacing large portions of troubled nations' sovereign debt with super-safe ECB-backed bonds carrying low interest rates. It's clear that Galbraith's ideas helped shape Varoufakis' controversial campaign to end "austerity" in Greece and protect government jobs and pensions.

Working alongside Varoufakis, Galbraith got an inside view of the chaotic maneuvering at a Eurogroup meeting of European finance ministers, held on February 16 in Brussels. "I stayed with the tech teams, from the 11^th to the 17^th, including the Brussels meeting," says Galbraith. "I was in the boiler room with the Greek guys, the working stiffs."

At the Eurogroup conclave, Pierre Moscovici, the EU commissioner for economic and financial affairs, presented Varoufakis with a draft communiqu? that allowed Greece to apply for an extension of its loan agreement while granting time to discuss a new growth program for Greece. As Varoufakis stated at the press conference after the meeting, he was poised to sign the Moscovici communiqu?, which he praised as a "splendid document" and a "genuine breakthrough."

But the chief of the Eurogroup, Jeroen Dijsselbloem, was working on his own document. "Yanis said, 'I have a text,' and Dijesselbloem said, 'No, this is the text.'"

Galbraith and the Greek team then attempted to combine portions of the two drafts into a document acceptable to both sides. "My day from that point, along with some other people, was taken up with trying to turn either of those texts into something that could be signed. In another half hour, we could have done it."

Then, according to Galbraith, German finance minister Wolfgang Schaeuble closed the meeting. "He was saying 'no'" to fashioning a joint statement as a prelude to a compromise, says Galbraith.

For Galbraith, the lack of coordination on the European side was shocking. "I'm an old Congressional staffer," he says. "To watch an official body function in this slipshod and ad hoc way, to watch the Eurogroup and the way things were done, was really a revelation."

On February 18, Varoufakis presented a formal request for an extension of Greece's loan agreement with the Eurogroup. Once again, the divergent responses left Galbraith confounded.

"Jean-Claude Juncker [president of the European Commission] said it was a good start," says Galbraith. He also notes that Germany's vice chancellor, Sigmar Gabriel, said that the loan extension letter was a "starting point" for negotiations. But Schaeuble contradicted Gabriel, dismissing the request as "not a substantial position."

"My eyes are bugging out watching this," says Galbraith. "This is Germany, the most powerful government in Europe!"

For Galbraith, the divisions in Germany, and among the nations themselves, have made it clear that the European leadership are poor negotiators. "They made the mistake of exposing to Yanis that they are playing a very hard game, but not playing it very well, from the point of view of basic political skills." He dismisses the idea that the Greek position is confusing. "I think the Europeans want to pretend to be confused, but the confusion exists in their minds, not in the Greek position."

For Varoufakis and Galbraith, petty politics is trumping sound economics. "The institutional players--the IMF, European Community, and ECB--have been constructive," says Galbraith. "But the creditors, the active players, are the finance ministers, and they are divided and hostile."

The camp strongly opposed to compromise includes Spain, Portugal, and Finland. "Their leaders all facing elections with rising opposition," Galbraith says. "They're terrified that their opponents will take heart from the Greek position." Hence, surviving in office means more than saving the Eurozone.

Breaking the impasse will most likely require the intervention of the only leader powerful enough to pull off such a maneuver: Angela Merkel.

Through all the turmoil, Galbraith's admiration for his friend Varoufakis has only increased. While many argue that Varoufakis' unorthodox wardrobe and provocative statements--remarking that the reform agreement amounts to "financial waterboarding," for example--are antagonizing Europe's financial establishment, Galbraith says that fellow ministers should welcome him as a rare truth-teller. "His honesty, clarity, and erudition are quite unknown in European circles, so I'm sure it's quite a shock to experience him for the first time," he says.

As an example of Varoufakis' unvarnished honesty, he cites his friend's statement that among those with whom he's negotiated, Schaeuble, a staunch opponent, is "the only one whom I have found to have intellectual substance."

After the depressing experiences in Brussels, Galbraith found the mood in Athens exhilarating. "Just three to six months ago, it was totally depressing. Now there's a complete change of mood; the sense of pride is restored," he says.

No one symbolizes that new optimism better than Varoufakis. "We walked together from the ministry to the Parliament nearby, and it's an experience," marvels Galbraith. "People in cars roll down their windows to shake his hand, bus drivers stop to salute him, he's surrounded by kids in the streets." Varoufakis even stopped for five minutes to reassure a cleaning lady looking for work, his hand on her elbow. "He's as much of a star as Alexis Tsipras [Greece's new prime minister]," says Galbraith.

Will Varoufakis fold to keep Greece in the Euro by dropping the growth platform that got the new government elected in the first place? "That's impossible," says Galbraith. "He'd get on his motorcycle and drive off. He gnashed his teeth to take the job. He wanted to put his ideas into practice."

Europe's finance ministers have never witnessed anything like Varoufakis. Merkel will need to decide if compromising with someone regarded as this radical and outrageous is really an option. The Euro's future may hang in the balance.

German and European Central Bank officials have grown increasingly obstinate in recent months, showing little sympathy for Greece’s appeals for leniency connected with its bailout agreement. It is unclear what the fallout would be if Greece were to impose capital controls and leave the euro, but it seems that Germany and the ECB just don’t care anymore.

Greece’s new left-wing government blinked on Thursday morning in its month-long standoff with its eurozone partners, saying that it would agree to a six-month extension of the expiring bailout agreement at its current terms so that the two sides could have more time to negotiate. It was a typical “kick the can down the road” move we have come to expect from EU officials, something that Greece’s new government promised it wouldn’t do just a couple days earlier.

The markets rallied on the news, with Greek bank stocks shooting up 10% and Greek 10-year bonds yields falling back to the single digits. The so-called “radical” Greek government finally fell in line with the status quo, and that itself was enough for the market to chill out and hobble onward.

But in a shocking turn of events, Germany’s finance ministry rejected the Greek proposal, saying that it amounted to a bridge financing deal that didn’t propose any “substantial” solutions to the problem at hand.

So, what has changed? Did Germany truly expect a real solution to this issue? Or was the finance ministry just pretending to play hardball to save face with the German public? This wouldn’t be the first time for Germany to claim it was calling Greece’s bluff and then fall apart at the end of the day. It has happened pretty much every time Germany has negotiated a bailout deal since the eurozone debt crisis began in 2009.

But this time could be different. A report in German newspaper Frankfurter Allgemeine Zeitung quotes an unnamed central banker from the ECB who believes that the Grexit may now be inevitable. “One gets the impression that the Greeks want to get out [of the euro] and are just looking for a scapegoat,” at this point, the unnamed central banker told the paper.

This comes a couple weeks after the ECB abruptly stopped taking Greek sovereign bonds from Greek banks as collateral for low-cost loans to fund their operations. The ECB had been loaning the banks money and accepting the junk Greek debt at face value even though it was worth a fraction of that amount in the real world, something that, naturally, angered Germany.

The ECB pulled this cheap financing as Greeks were pulling money out of the their banks amid growing fear of a Grexit, when the Greek banks needed the money the most. The Greek banks were forced to turn to their own central bank for cash, which also borrows from the ECB, but at a higher interest rate.

All this has accelerated the run on the Greek banks, forcing the Greek Central Bank to borrow at a frenetic pace from the ECB to make sure they have enough cash on hand to meet demand. But there is a limit to how much the Greek Central Bank can borrow from the ECB, 65 billion euros, and it appears that they just hit the ceiling. The Greeks reportedly asked the ECB to increase their line of credit by 10 billion euros, but the ECB agreed in an emergency meeting overnight that it would only increase it by 3 billion euros.

The ECB knows very well that money buys the Greek banks a week, two weeks tops. The Greek banks won’t need the money if the panic stops, but that won’t happen unless Germany relents and agrees to Greece’s demand for leniency. With Germany saying Nein today just to extend talks without granting any concessions, it is now clear that the whole situation may actually blow up this time.

Greece will then have to make a tough choice. They will either need to accept total defeat and continue on with the terms of the bailout agreement, which would probably result in a Greek default in a few months time, or they can institute capital controls (which would restrict people’s ability to withdraw cash), default on the bailout now, and leave the euro.

Will the Grexit cause the euro to fall apart? Mario Draghi, the head of the ECB, famously promised that he would do “whatever it takes ” to save the euro, so a Grexit may not automatically mean the end of the currency union. He has been preparing for years to counter the backlash that would follow a Grexit, most recently by announcing a multi-billion euro quantitative easing program that could stabilize the bond yields of EU countries if they explode post-Grexit. Will it be enough? No one knows for sure.

For Greece, neither of its option seems acceptable at this point. For some reason, Greeks overwhelmingly want to stay in the euro, which is why the Greek government swallowed its pride and agreed to kick the can down the road. Jeroen Dijsselbloem, the current head of the Euro group negotiations with Greece, called for a fourth “extraordinary” meeting tomorrow of finance ministers to discuss the Greek plan. While Dijsselbloem is somewhat hopeful that a deal can be struck--he said at the last meeting that he wouldn’t call another unless he thought a deal was close--it will be impossible to strike an agreement without German backing, meaning a Grexit could be just around the corner.

The rise in the provision of Emergency Liquidity Assistance (ELA), over which the ECB has control, is critical for Greece’s banks, and gives Athens some leeway while it tries to negotiate a financing deal with European partners.

The ECB had already raised the ELA available to Greek banks by 5 billion euros to about 65 billion last Thursday. The new cap is roughly 3.3 billion euros higher.

The person familiar with the talks said the Greek central bank had requested an extension of roughly 10 billion euros.

With Wednesday’s further modest increase, the ECB is keeping Greece’s banks -- and thereby the government in Athens -- on a tight leash.

“An extension and a small increase (in ELA) has been agreed,” said the person familiar with the talks.

The ECB Governing Council is due to meet again in two weeks.

The rules governing ELA stipulate that it is for the short term and should only be provided to solvent banks. But the solvency of Greece’s banks is tied closely to that of the state, which needs funding tied to its bailout program.

Greece will submit a request to the euro zone on Thursday to extend a “loan agreement” for up to six months though Germany says no such deal is on offer and Athens must stick to the terms of its existing international bailout.

The index gained 0.4% to close at 2,097, beating the previous high set Dec. 29 last year. The S&P has now added 1.8% on the year.

Stocks rose on optimism that Greece can reach a new debt agreement with European leaders when their talks resume next week. Meanwhile, the price of crude oil continued to tick upward with Brent crude gained more than 4%, to $57 per barrel.

The U.S. market responded positively to those factors, helping the S&P 500 complete its stark turnaround from a dismal January in which the benchmark index fell by 3%.

Also closing at a record high was the Russell 2000, as the small-cap index ended the day up 0.6% to close at 1,223.

The Dow Jones Industrial Average improved by nearly 47 points, or 0.3%, and ended the day above the 18,000-point mark for the first time since the end of December. The Dow finished the week at 18,019 -- less than 35 points from its last record close -- and is now up 1.1% on the year after also dropping by 3% during the month of January.

Meanwhile, the Nasdaq composite closed a week in which it gained more than 3% by adding 36 points, or 0.8%, to finish at almost 4,894. The tech-heavy Nasdaq closed the week at its highest level since the dot-com bubble burst in 2000 and is less than 160 points away from its all-time high.

The market had spent much of February recovering its losses from January, when falling oil prices and concerns over the economic and political turmoil in Europe sparked a string of market sell-offs.

Both types were on display in Europe Thursday.

The Bank of England signalled that it wouldn’t resort to the money-printing presses even if, as it expects, the rate of inflation falls below zero in the next few months.

Meanwhile, over in Sweden, the Riksbank joined the growing band of central banks with negative official interest rates, and announced an–albeit modest–10 billion kronor ($1.19 billion) quantitative easing program to ward off deflation. It also updated its guidance for the repo rate over the next two years, and now doesn’t expect it to be above zero until 2017. Just for good measure, it said it will cut rates further and print even more kronor to get inflation back to 2% if necessary.

The Riksbank is now the third central bank in Europe to cut its main rate below zero this year, following its Swiss and Danish counterparts. Like the Swiss and Danes, Sweden has seen inflation running at around or below zero for most of the last two years. Like the European Central Bank, which announced a much larger QE program last month, it’s afraid that the recent drop in oil prices will push the CPI down so far as to create doubts about the prospects for the economy overall.

By contrast, the Bank of England was pretty confident in its latest Inflation Report that the effect on inflation from the collapse in oil prices would be temporary. Governor Mark Carney said the 50% drop in oil prices was “unambiguously positive for the global economy,” and also pointed to the likely positive effects of the ECB’s QE on demand in the region.

As such, the BoE expects inflation to rebound to 2.1% by 2017. That’s partly because Brits are incurable spenders (consistently running a current account deficit while their continental rivals run large surpluses) so they’re more likely to spend the windfall from lower fuel prices than to save it, supporting the general price level. But it’s also because the recovery is more entrenched in the U.K. after eight straight quarters of growth (the B0E now expects GDP to grow 2.9% this year and next).

Although the causal link isn’t proven, the U.K., like the U.S., was an early and aggressive adopter of QE during the crisis. The U.K. jobless rate is now at a six-year low, although wage growth is as weak, if not weaker, than in the U.S..

Quite whether the BoE’s Carney is as happy with the market reaction as Riksbank governor Stefan Ingves is another matter. Both countries have the Eurozone as their biggest trading partner, and neither is entirely relaxed about the ECB’s attempts to revive the Eurozone economy through a lower exchange rate (albeit indirectly). While the Riksbank’s action managed to keep the krona on its long-term trend of depreciation against the euro (it fell to a five-year low Thursday), the pound rose to its highest level against the single currency since 2008.

That’s still not a currency war, in the classic sense, but Carney may be uncomfortably close to a currency sulk. The BoE’s upper lip may be stiff today, but the bottom one will be coming out if the pound rises much higher and starts killing the export sector.

The Dow Jones Industrial Average gained nearly 140 points, or 0.8%, to finish at 17,869. The blue-chip index received help from Coca-Cola’s KO earnings report, which beat Wall Street estimates and boosted the beverage-maker’s stock by 2.8%. The Dow is now about 45 points in the black for 2015 after dropping more than 3% during January before erasing most of those losses with a two-week rally that ended last week.

The S&P 500 and the Nasdaq composite gained 1% and 1.3%, respectively, on Tuesday. Both indices also turned positive for the year during the day’s trading.

U.S. investors Tuesday shrugged off concerns that Greece’s government would not reach a debt agreement with European leaders and potentially pull out of the European Union. They showed a little more optimism that they two sides could reach a deal in Brussels, where Greece’s finance minister is expected to introduce new economic reform proposals to a group of Eurozone leaders Wednesday.

London’s FTSE finished Tuesday down slightly while Germany’s DAX rose 0.9% and the stock exchange in Athens jumped nearly 8%.

Tuesday’s gains by U.S. stocks came despite crude oil prices retreating after a report from the International Energy Agency warned that worldwide oil supplies could approach record-high levels through the middle of the year and prices. Crude prices have plummeted more than 50% since last summer due to the global oil glut, though prices have ticked upward over the past week.

“If your economic plan is to count on exports to the U.S. [to produce growth], that’s not a plan that I would support,” said Jason Furman, who heads the President’s Council of Economic Advisers. “What Europe needs is more growth. Clearly, domestic demand needs to pick up.”

Furman was talking on Tuesday morning at a conference put together by The Economist magazine.

The U.S. economy has been improving lately. But some have questioned if the U.S. will be dragged down by the rest of the global economy, which appears to be flatlining. Furman said that he is “quite positive” on the U.S. economy for 2015, though he joked that part of his job is to have that view, and pronounce it at conferences. He said that slower growth overseas will be a “headwind” for the U.S., but he thinks that will be more than offset by lower oil prices. He also said that average monthly mortgage and other debt payments in the U.S. are at their lowest levels in a while and that should help boost consumption.

Nonetheless, Furman said he thought the growth of the U.S. economy would not be strong enough to pull the rest of the world out of its funk. U.S. consumption makes up 70% of the U.S. economy; it’s only 5% of Germany’s economy. While the European Central Bank’s recent announcement that it would buy bonds to bring down interest rates will help the region’s economy, Furman said it won’t be enough. He said that European countries have the resources to spend money to boost their own economies, and that it is something they should consider. Last month, the International Monetary Fund downgraded its growth expectations for France, Germany, and Italy. As a whole, Europe’s economy is expected to expand at a rate of just over 1% this year, and not much more in 2016.

Oliver Blanchard, who is the chief economist at the IMF and was talking on the same panel at The Economist conference, disagreed with Furman. He said it was incorrect to say that Europe was still in austerity mode. Budgets are expanding modestly, or not shrinking. But he said that European leaders should be concerned that markets could react negatively to more fiscal stimulus measures.

Furman disagreed, arguing that leaders often say that bond investors will sell at the first sign of stimulus spending but that the market supports such measures. Fiscal stimulus moves in Japan and elsewhere have not caused bond prices to fall, and interest rates to spike, he said.

“We have to make sure we are not inventing a bogeyman who won’t show up,” said Furman. “We are way past the point in Europe where they should be doing a big fiscal stimulus.”

It was an impressive burst of optimism for the new museum, considering Spain's spotty recent track record with cultural institutions. The country gave birth to the Guggenheim Museum Bilbao, an urban renewal gem that attracts a million visits a year. But it's also home to white elephants like the unfinished Ciudad de Cultura in Santiago de Compostela (price tag: over EUR300 million), as well as fraught new institutions like Avil?s' EUR44 million Centro Niemeyer.

Now, with the new University of Navarra museum, designed by Pritzker prize- winning architect Rafael Moneo, and the upcoming openings of the EUR77 million Centro Bot?n, designed by fellow Pritzker winner Renzo Piano, and M?laga's new "pop-up" branch of the Centre Pompidou, Spain is again building big cultural institutions. The question is, will the results be better this time?

The world's obsession with building iconic museums began with the huge success of the 1997 opening of the Guggenheim in Bilbao. A city famous for its fetid river and terrorist bombings by the Basque separatist group ETA suddenly was known for Frank Gehry's titanium-clad building and the art it held.

"Bilbao became the paradigm of a post-industrial city in economic hardship, where an emblematic building gave it an internationally recognized image. Dozens and dozens of cities tried to emulate it," says Joseba Zulaika, a professor at the Center for Basque Studies at the University of Nevada in Reno.

According to the Global Cultural Districts Network, in the next 10 years some $250 billion will be spent on the development of new cultural districts around the globe. The problem is that, in a rush to recreate the "Guggenheim Effect" by building lavish cultural projects, many cities have failed to budget for the costs or to verify that they have the right attributes to become the next Bilbao.

A typical example of this failure is the National Centre for Popular Music, an ?11 million museum in Sheffield, England that opened in 1999 and closed a little more than a year later after only 104,000 of an estimated 400,000 annual visitors came.

Beatriz Plaza, a professor of economics at Bilbao's University of the Basque Country, has studied the economic impact and reasons for the Guggenheim Museum Bilbao's success since shortly after it opened.

According to Plaza, cities that hope to ride a cultural institution to urban regeneration need to have a sufficient number of possible visitors in their catchment area, good transport connections, and a diverse local economy that provides enough wealthy locals and high-end services to support a museum and its visitors.

"Within an hour of Santander, you have Bilbao, with a population of 1 million in the urban area. And 2.5 million people in Basque country," Plaza says. "Both Santander and Pamplona, within an hour, have 2.5-3 million people."

Avil?s and Santiago de Compostela are smaller and much more peripheral locations to tourists, Plaza notes. And unlike Bilbao and Pamplona, their economies do not have the kind of industrial base that creates a local audience for cultural offerings and for the restaurants and services that spring up nearby. "Industry creates high-income people who appreciate culture," Plaza says.

Perhaps more important, many cultural sites are built without honestly budgeting the costs to build and keep them open, says Adrian Ellis, the former executive director of Jazz at Lincoln Center who founded AEA Consulting, a cultural institution consulting firm. Ellis describes an institution's cost structure as an iceberg, with the part above the water the capital expense and the larger part below the operating costs.

"I am daily stunned at how often people take to an advanced stage their thinking and planning and even building of a museum without thinking about the long-term operating costs," he says. "The success of Bilbao is, in part, that some wise person in the Basque administration was thinking about that at the time of planning."

Indeed, the Basque government promised to provide operating funds for the Guggenheim in Balbao, and it followed through, to the tune of EUR5.8 million last year. Meanwhile, the Niemeyer space in Avil?s closed briefly over a budget squabble, while the Chillida Leku museum in the Basque city of San Sebasti?n shut to the public after the family of sculptor Eduardo Chillida, whose work it exhibits, could not keep up with ongoing costs.

In light of these issues, there's reason to be optimistic about Spain's new museums. The Pamplona and Santander projects were both built with private funds, which kept them from reaching the 'Pharaonic' size of projects built by politicians with public funds. "When it's your money and you're a philanthropist, you usually know what you're getting into," Ellis says.

These projects also have dedicated operating budgets, with the Fundaci?n Bot?n, for example, promising EUR12.5 million annually to the Santander project.

There is another way, however: cultural institutions could move away from expensive buildings and big operating budgets altogether, and get more in step with the trend toward the light and virtual.

Consider Malaga's modest Centre Pompidou franchise: although there have been fights over the capital budget to recondition a building for the "pop-up" museum, it is still a relatively low EUR6.7 million. The M?laga government has announced a EUR3 million commitment from sponsors for the museum, which has a EUR4.2 million projected annual operating budget. And even if its running costs prove to be too much for the local government, the upside is they won't go on forever: the contract with the Pompidou is only set for five years.

Varoufakis, who describes himself as "the finance minister of a bankrupt country," desperately needs the ECB's cash to run the Greek government over the next few months and keep the nation in the Eurozone. Although Varoufakis praised the "fruitful exchange" of ideas, Draghi has declined to meet Greece's request that the ECB serve as its lender of last resort. Put simply, Varoufakis' rescue plan hinges on Draghi's full support, and right now, he's not getting it.

Varoufakis is pursuing two strategies at the same time. First, he's attempting to restructure the $270 billion in debt extended to Greece in the 2012 bailout agreement with its European neighbors and European institutions, including the ECB. That will take at least a few months, if it happens at all. Second, he faces a pair of potential crises--a banking collapse, and a cash crunch that would force Greece into bankruptcy and trigger a "Grexit" from the Euro.

Varoufakis needs time to negotiate the new debt agreements and implement a controversial growth plan designed to recharge the economy. To get there, he needs the ECB to support the Greek banks and also provide the short-term cash Greece requires to pay government workers and bondholders.

Greek Finance Minister Yanis Varoufakis speaks to media outside the European Central Bank in Frankfurt on February 4, 2015.Photograph by Kai Pfaffenbach -- Reuters

Let's start with Greece's banks. They've long suffered deposit outflows from depositors worried about a Grexit. At the start of the crisis in 2010, in an effort to forestall the banks from canceling billions in loans to Greek businesses, the ECB over the next four years furnished banks over $65 billion in funding through the ECB’s monetary facility.

In December 2014, a big wave of withdrawals buffeted the banks. The ECB came to the rescue by providing an additional $40 billion-plus cushion. The ECB has provided its funding as a line of credit. The banks can borrow as much as they need, when they need it, to the limit of over $100 billion. Since September, Greece has drawn down more than $12 billion from that $40 billion commitment--including over $2 billion in early February. "The ECB is 100% responsible for keeping the Greek banks afloat," says Nicholas Economides, an economist at NYU's Stern School of Business.

The ECB's commitment isn't permanent. It can "call" the line of credit--fully withdrawing its support--any time it wants. The final decision on whether it withdraws or extends its lending to the banks will likely be a political one, determined by the Eurozone's finance ministers. The ECB is providing its support on one major condition: that Greece deliver the reforms outlined in its 2012 bailout agreement with the so-called Troika, which includes the ECB, the IMF, and the European Commission. That pact is known as the "memorandum." The deadline for complying with the reform agreement is February 28. If the Troika finds that Greece is fulfilling its commitments, it will make one final bailout payment. The terms also state that the ELA may only continue if Greece pursues the reforms it agreed to. If not, the ECB must cut off its emergency assistance to Greece's banks.

But Greece is refusing to honor the reform agreements it made, which is a gambit you'd think would imperil the nation's banks. Varoufakis is pledging to reverse the previous government's privatization plans, hire thousands of new government workers, and pursue highly expansionist policies. That program clearly violates the "memorandum." He will need to persuade Draghi to keep supporting Greece's banks while the government reneges on the agreements that secured that support in the first place.

Varoufakis needs a second type of assistance from the ECB--extra cash, and soon. Except during a brief window early last year, when Greece's economy appeared to be on the mend, the troubled nation hasn't managed to sell government bonds on world markets since the crisis struck in 2010. But Greece has continued to borrow, and the lenders are none other than its banks. They now hold $17 billion in 3 and 5-year bills. Since the ECB is funding the banks, they needed the central bank's permission to buy those securities. The ECB didn't want to open a huge new source of financing for the government, since it might suffer the losses if Greece defaults. So it established a limit of $17 billion on bond sales to the banks. Borrowing reached that cap long ago.

In effect, the government is counting on one, and only one, source of funding to survive over the next few months: Selling more bonds to the banks. But for that to happen, it needs the ECB to substantially raise the $17 billion limit. In the first week of February, Varoufakis requested that Draghi raise the cap to around $29 billion, allowing Greece to raise an additional $11 billion by selling more bonds to its banks.

At their Brussels meeting, Draghi and Varoufakis didn't reach a deal. For now, Draghi is neither agreeing to extend assistance to the banks nor allowing Greece to raise emergency cash to run its government. Greece is practically broke right now. The government's cash reserves are estimated at a little over $3 billion at best. Without fresh funding, Greece could go bankrupt by mid-2015 at the latest.

"This puts the ECB in the most central position," says Economides. "The ECB is in a position to throw Greece out of the Euro. They're not politicians, they're a bank. Depending on the ECB is an extremely risky position for the new government to put themselves in."

Varoufakis and Draghi recognize the perils of not reaching an agreement. The world is watching this ultimate odd couple, and watching nervously.

Watch more about the ECB’s stimulus plan from Fortune’s video team:

Syriza's chief and Greece's new prime minister, Alexis Tsipras, is brazenly defying the European nations and institutions that support its stricken economy. Tsipras lost no time declaring that his triumph marks the moment when Greece "leaves behind catastrophic austerity ... and five years of humiliation and suffering."

Tsipras blames Greece's descent on the slate of tough, even brutal, reforms that its EU neighbors demanded in exchange for gigantic bailouts. He's pledging two major shifts in policy that, if enacted, will infuriate his European neighbors. First, Tsipras denies that Greece has any obligation to enact the liberalization measures that its creditors--which include the International Monetary Fund, the European Commission, and the European Central Bank, known as the "Troika"--negotiated with two previous governments. "The Troika is dead!" Tsipras announced in his post-election address.

Second, Tsipras is demanding a substantial reduction in the roughly $270 billion in debt that Greece owes to the EU nations. Those funds are dispensed through the European Stabilization Mechanism, an EU organization that gets its money directly from Eurozone members such as France, Germany, and Spain. It's designed to provide a firewall to protect the Euro. Tsipras contends that his Eurozone partners should suffer big losses, paid for by their taxpayers, for the benefit of Greece.

Watch more coverage on the euro from Fortune’s video team:

The Eurozone is witnessing an unprecedented display of hubris, the undoing of ancient Greek warriors. Rather than demanding debt relief the usual way, by promising deeper reforms, Tsipras has pledged to renege on Greece's debts while scuttling all commitments to unshackle its economy.

"It's a surreal situation," marvels Yannis Ioannides, an economist at Tufts University. "The new government is promising to do things with no money to do them. What does it mean for a government to say we don't recognize the agreements signed by the previous government?"

If the new government sticks to its sloganeering stance, Greece--probably through a stumbling accident--will exit the Euro. Given its policies, a "Grexit" would unleash a wave of hyperinflation unseen in Europe for decades. But it's not at all certain that Tsipras will let ideology lead to disaster. Greece depends on the EU and European Central Bank for the funds it needs to keep running--and hopefully, that reality will temper Tsipras' demands. The crux of Greece's problem isn't that it has embraced the reforms demanded by its creditors. In fact, the nation has skirted those reforms and, in the process, done far too little to modernize its markets.

To be sure, Greece has made progress on the fiscal side. It has substantially reduced government spending and lowered once-yawning budget deficits to the point where it now generates a "primary surplus," meaning that its revenues exceed expenses before covering interest. That's a big improvement, since the government is no longer forced to borrow heavily simply to make interest payments (which, as we'll see, are manageable due to a 2012 restructuring deal with its EU creditors}.

Yet the shrinkage in Greece's super-sized public sector did nothing to lessen the suffering of its citizens. In moving towards a balanced budget, the Greek government has substantially lowered wages and pensions, and companies followed suit. But shrinking pay failed to translate into a like decline in prices, as it would have in a competitive economy. Instead, the prices of groceries and drugs--and the overall cost of living--fell far less than the decline in incomes. That painful combination means that Greeks increasingly buy less and less of anything. To make matters worse, Greece imports an usually high proportion of the goods it consumes, from cars to PCs, and the prices of foreign products remained steady while Greek incomes shriveled.

Why did the cost of local goods stay so high during the downturn? It's the legacy of over-regulation that’s governed Greek products and professions for decades, rules specifically designed to stifle competition. "Every aspect of economic life is highly regulated in Greece," notes Costas Meghir, an economist at Yale University.

Greek law mandates that pharmacies generate minimum profits of 15% and grants them a monopoly on the sale of non-prescription drugs and even baby formula. That regime effectively prevents lower-cost retailers from giving consumers a better deal. Licenses for truck drivers cost over $600,000, and no new ones have been issued since the 1970s. A lawyer practicing in Athens lacks the authority to serve clients in Thessaloniki. Foreign cruise lines are effectively barred from starting and ending journeys in Greece. That's driven the big operators to run their tours from Turkey and Israel instead. Companies are banned from laying off more than 4% of their workforces without receiving government permission that's predictably hard to obtain.

For many years, those rules prevented Greece from emerging as a force in technology and manufacturing, despite its hard-working, well-educated workforce. Its output-per-worker is just 75% that of its European neighbors, the same meager level as at the start of the financial crisis. Under an agreement with its EU creditors, Greece is obligated to achieve a long list of market-opening reforms. That deal is known as the "Mnemonio," the Greek word for memorandum. Even the previous center-right government did not do enough to comply with the Mnemonio. It masked the lack of progress with half-measures, laws that were passed but never implemented, and requests for more time.

"The crisis created chances for structural reforms, such as the opening of closed professions, tax reform, and privatizations to increase competition," says Nicholas Economides, a professor of economics at NYU's Stern School of Business. Even the previous government, he says, "tried not to change much." Following a poor showing in the European parliamentary elections last year, it fired reformist ministers and retreated on plans to trim the government's bloated workforce.

So what's next for Greece? Here are two possible scenarios. The first is the "Greek tragedy" path, which could proceed from a number of causes--the many possibilities are in themselves a major cause for concern. The second is the pragmatic, compromise approach, which could allow Greece to remain in the Eurozone.

What could cause the Greek tragedy? If Tsipras continues to demand that Greece renege on its debts, dump the reform agenda, or both, Greece is headed for disaster. In the next several months, Greece will need to confirm past commitments or repay loans and retire bonds to secure continued funding from the EU and ECB, funding it can't do without. Defying its creditors at any of these three junctures could seal its fate. The IMF was scheduled to give Greece $8 billion in fresh funding in September. But because Greece is lagging on its reform agenda, the IMF hasn't agreed to make the payment. Yet the new government is counting on that money, and over $2.5 billion more from the IMF in 2015, to make its budget work. It's also planning to spend an extra $22 billion or so to hire more government workers and raise their pensions and pay. But it's highly unlikely that the IMF will provide that money if Greece ditches the reform agreement.

Greece faces a second, crucial showdown with the European Central Bank. The nation's banks have suffered large withdrawals of cash in recent years, a trend that accelerated just before the recent elections. On January 22, the ECB advanced Greece's central bank around $45 billion in emergency funding to supply liquidity to the banks it regulates--in addition to the more than $60 billion it had previously given to those banks. Greece agreed to repay about $8 billion to the ECB in July. Tsipras now claims Greece won't make the payment. "The ECB operates under extremely strict rules," says Economides. "It's likely the ECB would withdraw all of its support for the banks if Greece refuses to pay."

The third obstacle is Syriza's demand that the EU nations forgive a big chunk of its debt. "That's totally unfeasible, insane," says Economides. "No politician will say to their taxpayers, 'You need to pay for the Greeks!'"

If Greece defies the EU and ECB over any of these commitments, Tsipras will lack the funds to keep the government running, or, in the latter two cases, the EU will remove the essential support of the ECB, causing a credit crisis. In that case, Greece would need to flee the Euro and reinstate the Drachma. It would then be free to print new currency to pay its debts and fund its vision of a still-bigger government. That's a recipe for rampant inflation.

None of this has to happen. The interest rate on Greek debt is just 1.82%, and it isn't obligated to pay any interest for between 13 and 25 years on 80% of its borrowings. If its creditor nations agreed to extend the maturities to 75 years, Greece could easily handle its current debt load. It might be enough for Syriza to withdraw its pledge to roll back previous reforms and to honor its debts in exchange for those longer maturities. "I think they will make a u-turn," says Economides. "The money they need is so gigantic. They will not have a choice."

The EU has long been girding for a Greek departure from the Euro. The new government will not succeed in blackmailing its neighbors into granting more bailouts just to keep Greece in the club. Europe's mainstream governments dread making a special deal with Greece a lot more than a Grexit. If the Troika caves, they'll hand a powerful weapon to radical, anti-bailout parties that rail against the cost and constraints of the Eurozone and EU.

In theory, pragmatism should prevail. Then again, just look at all the ways in which things could go horribly wrong. The sheer number of them is scary indeed.

On the same morning that the Conference Board announced that consumer confidence reached its highest level since August 2007, the stock market took a nose dive, driven by disappointing earnings announcements by big-name companies like Caterpillar CAT and Dupont DD , and downbeat outlooks from the likes of Pfizer PFE and Bristol-Myers Squibb BMY .

The missed earnings and revised expectations are due in part to a rapidly appreciating dollar, which is being driven up by the relative strength of the U.S. economy as well as the announcement of central bank bond buying in Europe. A more expensive dollar means that U.S. companies are less competitive abroad.

But Caterpillar in particular has been negatively affected by the sharp drop in the price of oil and other commodities. The drops have led energy and mining companies to reduce their investment in the kind of accounts for the bulk of Caterpillar’s sales.

The disappointing news can also be hung on the fact that the rest of the world’s economic outlook isn’t nearly as rosy as it is in the U.S. Both China and Europe have recently reduced their growth forecasts. Meanwhile, emerging markets like Brazil, Turkey, and Russia are reeling amid falling oil prices and whipsawing foreign investment.

In a press release this morning, Caterpillar Chairman and CEO Doug Oberhelman said that the sharp decline in the price of oil is the single biggest factor contributing to its prediction that sales will fall roughly 9% in 2015.

But the company did not discount the impact of falling prices in other commodities, in addition to slow growth in Europe, and relatively slow growth in China.

“We’re not seeing any decent growth out of Europe,” said Mike DeWalt, a Caterpillar vice president said in a conference call this morning with analysts. “The developing countries like Brazil and China, are, shall we say, challenged.”

It’s important to remember that the decline in the price of oil is partly due to slower growth abroad and in China in particular.

Caterpillar’s performance is often seen as a gauge of the health of the global economy because it sells the sort of equipment--construction and mining--that functions as an engine of global economic growth. Caterpillar’s diminished outlook suggests the potential for trouble ahead.

The U.S. economy, by contrast, is not highly dependent on sales abroad--U.S. GDP is composed of just 10% exports, while consumer spending makes up north of 70%. So, while weakness abroad certainly isn’t good for the American economy and it is a bad sign for export-heavy companies like Caterpillar, it’s not something that should worry most workers or business owners stateside.

In the U.S., strong job and GDP growth, low inflation, and the jolt of cheap energy prices should all conspire to make 2015 the strongest year yet in the economic recovery. As long as Europe is able to muddle along and China’s growth doesn’t drop off the table too sharply, the struggles abroad will likely steer clear of America’s shores.

U.S. stocks fell dramatically immediately following the opening bell Tuesday morning after a series of big U.S. companies issued dour earnings reports, and a drop in durable goods orders shook investors’ confidence in the economic outlook for 2015.

The Dow Jones industrial average plummeted at the open, and was down 291 points at the close having tumbled 390 points earlier in the session. One week after a market surge nearly wiped out all of market’s losses for the year, the blue-chip index is now some 400 points below where it started 2015.

The Nasdaq composite was down 2% at the close, while the S&P 500 was off just over 1%. All three major U.S. indices were basically flat on Monday.

Orders for durable goods -- including anything from home appliances to commercial aircraft -- in the U.S. dropped 3.4% in December after the fell more than 2% the previous month, according to new data from the Commerce Department.

Meanwhile, a diverse set of companies that includes Microsoft MSFT , Procter & Gamble PG and Caterpillar CAT saw their share prices drop Tuesday morning as a result of weak quarterly earnings reports.

Microsoft took an especially hard hit, falling nearly 10% in early trading after analysts downgraded the company’s stock due to a decline in earnings in its most recent quarter. Caterpillar’s stock fell more than 7% after the company posted a disappointing forecast for 2015 due to the ongoing decline in prices of commodities such as oil and copper.

Tuesday’s U.S. sell-off came on the heels of a decline for European stocks, which had improved recently on the European Central Bank’s new stimulus measures before falling again Tuesday due to concerns over political upheaval in Greece. London’s FTSE 100 dropped 0.6% during the day while Germany’s DAX fell 1.6%.

Greek stocks fell on the news that the anti-austerity Syriza party will take power. But European stocks and the Euro seemed to be largely unaffected by the news, despite the fact that Syriza vows to fight the Troika of the European Commission, the IMF, and the European Central bank and force them to forgive some Greek debt and allow the country to enact a program of stimulus spending, among other reforms.

Markets are shrugging off the news because they still view the chances of Greece leaving the Euro as remote. “The new government will find that the Troika plans to play hardball,” says Tom Elliott, International Investment Strategist at deVere Group. Elliott argues that Greece has little leverage in its negotiations with its debt holders. It has a EUR4.5 billion bond maturing in March and two similarly large payments due in July and August, which it won’t be able to pay without aid from Europe. While its debt holders might be willing to extend the maturity on these debts or lower interest rates, the Troika won’t budge on debt forgiveness out of fear that it would encourage other debtor nations to ask for similar concessions.

The only leverage Greece has is to threaten to exit the euro, an act that would surely cause a banking crisis and a severe recession--at least in the short term--in Greece without doing much broader damage to the eurozone economy. The newly elected representatives in Greece will surely be blamed for such a fiasco. Polls indicate that despite Greece’s economic troubles, a majority of citizens want to remain in the euro.

But are investors here missing the forest for the trees? Sure, Sunday’s election might not be the cause of the immediate dissolution of the eurozone. But it certainly isn’t a good sign for the currency union and its leaders’ plan for reviving the European economy, or for European political cohesion.

“This was a huge landslide, a larger win than pretty much anybody expected,” says Ian Bremmer, president of the Eurasia Group. “And this party has taken one of the most directly anti-German, anti-European positions you could take, not just economically but politically.”

The anti-EU sentiment isn’t just a product of the depression-like conditions that Greek citizens have been enduring. In Spain, where elections at the end of 2015 will have huge implications for the future of the Eurozone, another anti-bailout party, Podemos, has been gaining support. Meanwhile, in France, polls indicate that the far-right eurosceptic Marie La Pen would win the first round of the 2017 French Presidential elections if they were held today. Even Germany, the stalwart of the status-quo, has an ascendent anti-euro party, called Alternatives for Germany, which recently won big gains in state elections.

So, while Greece’s election results will not likely to be a catalyst for a sudden break up of the Euro, they can be viewed as yet another in a series of events that suggest that the union is failing. Sunday’s elections offered another example of the “disintegration and fragmentation of Europe as an effective source of government,” Bremmer says.

The one thing that could jolt the EU back toward greater unity and a renewed sense of common purpose is economic growth. But even in the wake of the announcement of stimulus measures from the ECB, there isn’t a great deal of good economic news to report in Europe. The European Union estimates that the eurozone economy expanded at a measly 0.8% last year and will only grow by just 1.1% this year. With widespread unemployment in countries like Spain, Greece, and Portugal, and a banking system that remains undercapitalized, there’s little reason to believe that the European economy is going to improve enough in the coming months such that mainstream parties can stem their losses at the polls.

Markets might be taking it easy for now, soothed by the massive bond-buying program the ECB announced last week. But the long-term picture for the European project looks a little worse today than it did a week ago.

Greek leftist leader Alexis Tsipras promised on Sunday that five years of austerity, “humiliation and suffering” imposed by international creditors were over after his Syriza party swept to victory in a snap election on Sunday.

With about 92 percent of votes counted, Syriza was set to win 149 seats in the 300-seat parliament, taking 36.3 percent of the vote, 8.5 points ahead of the conservative New Democracy party of Prime Minister Antonis Samaras.

Samaras conceded victory but only the final result, expected in the early hours of Monday will show whether Syriza has won the 151 seats that would allow it to rule alone.

Nevertheless, the 40-year-old Tsipras is on course to become prime minister of the first euro zone government openly opposed to the kind of severe austerity policies which the European Union and International Monetary Fund imposed on Greece as a condition of its bailout.

“Greece leaves behinds catastrophic austerity, it leaves behind fear and authoritarianism, it leaves behind five years of humiliation and anguish,” Tsipras told thousands of cheering supporters gathered in Athens.

Financial markets reacted nervously to the victory of Tspiras, who has promised to renegotiate Greece’s debt agreements, fearing potential conflict with other euro zone governments that could put more strain on the currency bloc.

The euro slid to near an 11-year low and U.S. stock futures fell as Asian markets opened on Monday.

Germany, Europe’s biggest economy, has insisted Greece must respect the terms of its 240 billion euro bailout deal, which saved the country from bankruptcy but at the cost of bitter sacrifices by the Greek people.

As thousands of flag-waving supporters hit the streets of Athens, some shedding tears of joy, Germany’s Bundesbank warned Greece it needed reform to tackle its economic problems.

Syriza’s campaign slogan “Hope is coming!” resonated with voters worn down by huge budget cuts and heavy tax rises during six years of crisis that has sent unemployment over 25 percent and pushed millions into poverty.

“We hope our expectations will be fulfilled,” said 47-year-old teacher Efi Avgoustakoushe. “On Monday in class, we’re not allowed to comment and take sides but we will be smiling.”

'Lost dignity'
Tsipras said he would cooperate with fellow euro zone leaders for “a fair and mutually beneficial solution” but said the Greek people came first. “Our priority from the very first day will be to deal with the big wounds left by the crisis,” he said. “Our foremost priority is that our country and our people regain their lost dignity.”

He has promised to keep Greece in the euro and has toned down some of his rhetoric but his arrival in power would mark the biggest challenge yet to the approach adopted to the crisis by euro zone governments.

Syriza’s victory is likely to encourage other anti-austerity parties which are winning support across Europe, such as the Podemos movement in Spain.

But it might also strengthen the hand of mainstream leaders including French President Francois Hollande and Italian Prime Minister Minister Matteo Renzi who argue that orthodox austerity policies have failed to produce the economic growth which Europe needs to recover fully from the global financial crisis.

Hollande expressed in a statement his “desire to pursue the close cooperation between our two countries in service of growth and the stability of the euro zone”.

Finnish Foreign Minister Erkki Tuomioja was more forthright, saying he believed the result would change the debate in Europe and put more emphasis on growth and employment. “This is a slap at what I see as a very right-wing economic policy in Europe,” Tuomioja, a Social Democrat, told the website of the Helsingin Sanomat newspaper.

However with Greece’s economy unlikely to recover for years, Tsipras faces enormous problems and his victory raises the prospect of tough negotiations with European partners including German Chancellor Angela Merkel.

Greece’s bailout deal with the euro zone is due to end on Feb. 28 and Tsipras’ immediate challenge will be to settle doubts over the next installment of more than 7 billion euros in international aid. EU finance ministers are due to discuss the issue in Brussels on Monday.

If Syriza falls short of a majority, Tsipras will have to try to build a coalition with smaller parties or form a minority government with ad-hoc support from others in parliament.

“It’s a historic win,” said Athens-based political analyst John Loulis, adding that Tsipras would have to form a coalition to prevent renewed instability. “He has no other option, the last thing the country needs would be another round of elections

Negotiations are likely to begin immediately, and both the small Independent Greeks party and centrist To Potami party, said they would be willing to support an anti-bailout government. If Syriza requires support to govern, it may find itself hostage to its partners’ demands, raising questions over how durable a Tsipras government would prove.

Standoff with Berlin
Tsipras has promised to renegotiate agreements with the European Commission, European Central Bank and International Monetary Fund “troika” and write off much of Greece’s 320 billion-euro debt, which at more than 175 percent of gross domestic product, is the world’s second highest after Japan.

Coming after the ECB’s move to pump billions into the bloc’s flagging economy, Sunday’s result will stir consternation in Berlin. A senior lawmaker in Merkel’s conservative party said the result showed Greek voters had turned away from austerity but he said Europe could not accept rejection of the bailout.

“We must not reward the breaching of agreements,” Wolfgang Bosbach told the daily Osnabruecker Zeitung newspaper. “That would send completely the wrong signal to other crisis-stricken countries that would then expect the same treatment.”

Tsipras wants to roll back many of the measures demanded by the “troika”, raising the minimum wage, lowering power prices for poor families, cutting property taxes and reversing pension and public sector pay cuts.

U.S. investment bank J.P. Morgan said the result could weigh on markets but that it considered speculation over a possible Greek exit from the euro was “a stretch” and a negotiated deal appeared the most likely outcome. “Our base case remains that a Syriza government or Syriza-dominated coalition would alter its platform to retain troika financing,” it said.

Greece, unable to tap the markets because of sky-high borrowing costs, has enough cash to meet its immediate funding needs for the next couple of months but it faces around 10 billion euros of debt repayments over the summer. ($1 = 0.8923 euros)

While some economic commentators have been calling for such a program for years, as my colleague Geoffrey Smith points out, there’s plenty of reason to believe the effort won’t work as intended. Opponents of a European QE program argue that it won’t stimulate investment because the continent’s badly damaged banks and slack demand are the primary cause of the problems in Europe, rather than tight credit conditions.

Meanwhile, governments like Germany, which are running balanced budgets, are loathe to spend more to stimulate deeply depressed and indebted countries elsewhere in the Eurozone, an aggressive strategy that many economists deem necessary to jolt the continent back into growth mode.

Economist Martin Feldstein of Harvard University published a paper with the National Bureau of Economics this week that argues for an alternative approach European governments can adopt to stimulate investment. He advocates for a tax credit to businesses that invest in new projects, which can be paid for by an overall increase in the corporate tax rate. Writes Feldstein:

There are many ways that changing tax rules can increase aggregate spending without raising the fiscal deficit. Investment in plant and equipment can be stimulated by a temporary increase in the tax deductible depreciation rate on new investments in plant and equipment or by an enlarged investment tax credit. It would also be possible to reduce the net cost of funds by converting the deduction for business interest to a refundable credit at a higher effective rate. The cost of equity capital could be reduced by allowing deductions for dividends on common stock or preferred equity.

The resulting revenue loss could be balanced by a temporary rise in the corporate tax rate, effectively taxing the return on old capital while stimulating new investment. The necessary rise in the corporate tax rate could be adjusted after seeing the favorable effect of the policy on economic activity and tax revenue.

Feldstein argues that these benefits could be extended to consumers by giving tax breaks to home builders and homebuyers in the form of mortgage interest deductions. Such deductions could be rendered revenue neutral by raising rates on income elsewhere.

Another appealing part of this program is that while it would work better in a coordinated effort between countries, individual countries could enact these programs without approval from the EU government, as these measures would be revenue neutral and not run afoul of EU restrictions on increasing budget deficits.

By Ian Bremmer, TIME

International stories rise and fall so quickly in today's media. On Monday, it's civil conflict in Ukraine. On Tuesday, it's the rise of the Islamic State of Iraq and Greater Syria (ISIS). By Wednesday, the headlines are on to something else. Amid the global whiplash, it's easy to lose sight of the larger picture. So as the new year begins, it's useful to take a broader look at where these stories are headed--and to track the next wave of market-moving surprises in international politics.

Every January Eurasia Group, the political risk consultancy I founded and oversee today, publishes Top Risks, a roundup of the geopolitical trends we consider most likely to change our world in the coming year. This ranking reflects our forecast of which global storylines are most likely to play out over the next 12 months, which will have biggest impact on the markets and politics--and where we can expect surprises.

In 2015, political conflict among the world's great powers is in play more than at any time since the end of the Cold War. U.S. relations with Russia are now fully broken. China's powerful President Xi Jinping is creating a new economy, and the effects will be felt across East Asia and the rest of the world. Geopolitical uncertainty has Turkey, the Gulf Arab states, Brazil and India hedging their bets.

But the year's top risk is found in once placid Europe, where an increasingly fractured political environment is generating new sources of conflict.

1. The politics of Europe

European economics aren't as bad as they were at the height of the eurozone crisis in 2012, but the politics of the continent are now much worse. Within key countries like Britain and Germany, anti-EU political parties continue to gain popularity, undermining the ability of governments to deliver on painful but needed reforms. Friction is growing among European states, as peripheral governments come to increasingly resent the influence of a strong Germany unchecked by weak France or absent Britain. Finally, a resentful Russia and an aggressive ISIS will add to Europe's security worries.

2. Russia

Sanctions and lower oil prices have weakened Russia enough to infuriate President Vladimir Putin, but not enough to restrain his actions. Moscow will continue to put pressure on Ukraine, and as a result, U.S. and European sanctions will tighten. As Russia's economy sags, Putin's approval ratings will depend increasingly on his willingness to confront the West. Western companies and investors are likely targets--on the ground and in cyberspace.

3. The effects of China slowdown

China's economic growth will slow in 2015, but it's all part of Xi's plan. His historically ambitious economic reform efforts depend on transitioning his country to a consumer-driven economic model that will demand levels of growth that are lower, but more sustainable. The continuing slowdown should have little impact inside China. But countries like Brazil, Australia, Indonesia and Thailand, whose economies have come to depend on booming trade with a commodity-hungry China, will feel the pain.

4. The weaponization of finance

For the moment, the American public has had enough of wars and occupations, but the Obama administration still wants to exert significant influence around the globe. That's why Washington is weaponizing finance on a new scale. The U.S. is using carrots (access to capital markets) and sticks (varied types of sanctions) as tools of coercive diplomacy. The advantages are considerable, but there is a risk that this strategy will damage U.S. companies caught in the crossfire between Washington and targeted states. Transatlantic relations could suffer for the same reason.

5. ISIS, beyond Iraq and Syria

ISIS faces military setbacks in Iraq and Syria, but its ideological reach will spread throughout the Middle East and North Africa in 2015. It will grow organically by setting up new units in Yemen, Jordan, and Saudi Arabia, and it will inspire other jihadist organizations to join its ranks--Ansar Bayt al Maqdas in Egypt and Islamists in Libya have already pledged allegiance to ISIS. As the militant group's influence grows, the risk to Sunni states like Saudi Arabia, the United Arab Emirates and Egypt will rise.

6. Weak incumbents

Feeble political leaders, many of whom barely won reelection last year, will become a major theme in 2015. Brazil's Dilma Rousseff, Colombia's Juan Manuel Santos, South Africa's Jacob Zuma, Nigeria's Goodluck Jonathan and Turkey's Recep Tayyip Erdogan will each face determined opposition and formidable obstacles as they try to enact their political agendas.

7. The rise of strategic sectors

Global businesses in 2015 will increasingly depend on risk-averse governments that are more focused on political stability than on economic growth, supporting companies that operate in harmony with their political goals and punishing those that don't. We'll see this trend in emerging markets, where the state already plays a more significant role in the economy, as well as in rogue states searching for weapons to fight more powerful governments. But we'll also see it in the U.S., where national security priorities have inflated the military industrial complex, which now includes technology, telecommunications and financial companies.

8. Saudi Arabia vs Iran

The rivalry between Shiite Iran and Sunni Saudi Arabia is the engine of conflict in the Middle East. Given the growing reluctance of Washington and other outside powers to intervene in the region, increasingly complex domestic politics within these two countries and rising anxiety about the ongoing negotiations over Iran's nuclear program, we can expect Tehran and Riyadh to use proxies to fuel trouble in more Middle Eastern countries than ever in 2015.

9. Taiwan/China

Relations between China and Taiwan will deteriorate sharply in 2015 following the opposition Democratic Progressive Party's landslide victory over the ruling Nationalist Party in local elections this past November. If China decides that its strategy of economic engagement with Taiwan has failed to advance its ultimate goal of reunification, Beijing might well backtrack on existing trade and investment deals and significantly harden its rhetoric. The move would surely provoke public hostility in Taiwan and inject even more anti-mainland sentiment into the island's politics. Any U.S. comment on relations between China and Taiwan would quickly increase resentment between Beijing and Washington.

10. Turkey

Lower oil prices have helped, but President Erdogan has used election victories in 2014 to try to sideline his political enemies--of which there are many--while remaking the country's political system to tighten his hold on power. But he's unlikely to win the authority he wants this year, creating more disputes with his prime minister, weakening policy coherence and worsening political unpredictability. Given the instability near Turkey's borders, where the war against ISIS rages, that's bad news. Refugees from Syria and Iraq are bringing more radicalism into the country and adding to economic hardship.

It looks like another strong day for the markets Thursday, as stock futures point to a sharply higher open after the Dow surged 288 points Wednesday in response to the Fed's most recent policy decision. The Fed set the stage for a rate hike in 2015, but reiterated that such a move would be contingent upon the state of the economy.

Also Wednesday, President Obama announced the normalization of relations with Cuba more than 50 years after the blockade began (and, to be fair, more than 20 years after the collapse of the Soviet Union and the end of the Cold War.) The Cuba news could have a big impact on the U.S. economy, particularly in vice industries such as alcohol and tobacco.

Here’s what you need to know about in business news today.

1. Sony halts ‘The Interview’

Sony Pictures made a big move in the ongoing hacking scandal yesterday, postponing -- and possibly canceling -- the release of the film “The Interview” following threats from the group called the “Guardians of Peace.” Sony SNE , as well as theater chains who had already said they would not show the film, took plenty of heat on social media from people claiming they caved to terrorist threats.

2. Nike takes an earnings run

The athletic company based in Portland, Ore., (much to the chagrin of some young execs) will release earnings this afternoon, and the company is expected to report higher earnings per share rise from a year ago. One thing to watch for will be the effect of currency volatility on Nike’s NKE overseas operations.

3. Amazon launches Prime Now

Amazon AMZN has launched Prime Now, a service offering one-hour delivery on thousands of products. It's the newest benefit for Amazon Prime members, and offers delivery of daily essentials through a mobile app.

4. Putin speaks

Vladimir Putin talked about the state of the Russian nation today, and his talk was, well, wide-ranging. He said the Russian economy and the ruble will rebound, and he wouldn’t commit to whether or not he would stand for election again in 2018. Putin also, as is his wont, got metaphorical, comparing Russia to a bear protecting its territory. He said economic growth would return by 2017.

5. Swiss go negative

Switzerland's central bank said it would introduce negative interest rates to stop further currency appreciation, making its most desperate attempt yet to save local industry from a disastrous currency appreciation caused by inflows of capital seeking a 'safe haven' from turbulent markets across the world, writes Fortune's Geoffrey Smith.

The European Parliament in late October called on Internet companies operating in the region to “unbundle” its search engines from its other commercial properties. Although no companies were named, the motion was aimed squarely at Google GOOG , the leading search engine by a long shot in Europe with an estimated 90 percent market share.

The non-binding resolution had no legal weight, but sent the strongest signal yet to the European Commission to take action after almost four-years worth of unsuccessful negotiations to settle an ongoing antitrust probe into the company’s business practices. The company has been accused of anti-competitiveness including claims it deliberate buried search results of rival sites and services. The recent motion sought to “prevent any abuse in the marketing of interlinked services by operators of search engines.”

Newly-elected EU competition commissioner Margrethe Vestager said in November that she would “need some time” to review the case, which has been kept open by her predecessor Joaqu?n Almunia, and talk to complainants before moving forward.

So now what? There are several paths forward, experts say.

“What’s most likely to happen, and what will hopefully happen, is a continuation of the resolution for which Almunia set the framework before he left office,” says David Balto, a former U.S. Justice Department antitrust lawyer.

Politics and pressure behind the scenes from Google’s competitors--including Microsoft MSFT --have dragged the case out “to draw as much blood as possible,” Balto argues. Shortly after the parliament’s vote, one unnamed senior EU official told Reuters that the 28-member state bloc had been used as a “battleground” by American companies. After three rounds of settlement negotiations, Balto says Google’s efforts to address the matter have resulted in better competition in the region.

One question is whether the Commission has enough evidence to support moving from seeking a settlement to conducting an infringement procedure. Florian Wagner-von Papp, director of the University College London’s Institute of Global Law, tells Fortune that he wishes the EC would “put up or shut up.” Antitrust officials should either charge the search giant with flouting European antitrust law, he says, or drop the case altogether. The alternative? More settlement negotiations and “political mud-slinging” by Google’s supporters and opponents.

By charging Google with antitrust offenses, the Commission can take any measures it deems necessary to end that infringement. Could that really include a break-up of Google? In theory, yes--the European Commission’s antitrust division has the right to force a company operating in the region to restructure. But Wagner-von Papp is willing to make a big bet that it won’t happen. “The Commission has to date never imposed a structural remedy in an infringement decision,” he says.

Still, a move toward an infringement decision could leave Google facing fines of up to 10 percent of its annual global sales for the affected years, a staggering amount totaling billions of dollars. The reality has been more conservative. The biggest antitrust fine in the region’s history--levied against Intel years ago but later upped by Europe’s top court--barely broke 4 percent.

Splitting up Google by unbundling its search business from its advertising business would leave the company without a way to make money from its search results, Wagner-von Papp says. Such a move is “nonsense,” he says. “The search engine can be free for users only because Google gets its revenue from advertisers and can channel consumers to their vertical search results,” he says, “much like newspapers can be free if it sells ad space for a high price.”

Balto agrees, calling it an “extreme proposal” that few people take seriously. “Google relies on a lot of synergies among products and advertising revenue that works across products to do what they do,” he says. Consumers would actually suffer if Google’s search business was unbundled from its advertising services.

Politics remain a sore point for those involved. The European Parliament’s involvement was unusual without any prior committee inquiry, Brussels-based antitrust solicitor Matthew Hall says, and the parties on each side of Google are pushing for their own resolution to the case.

During his tenure as Europe’s antitrust chief, Almunia made it clear that he would not be swayed by politics. It’s not yet clear which path Vestager plans to take or which cards she will play to get there. Vestager will “decide on how to take the ongoing antitrust investigations into Google’s business practices forward once she has heard what those most directly affected by the practices in question have to say,” a spokesperson for the European Commission says.

Balto is optimistic. “There are good signs that Vestager will not be swayed,” he says. “I don’t think the delay will lead to a rush to judgment.”