Drachmas Reuters

It is still early in the game, but the latest polls from Greece appear to indicate that, after having indulged in a voter rebellion in the May 6 elections, the Greeks are returning to reality.

For the first time the two major parties that accepted the austerity package -New Democracy and PASOK - are being given a chance to form a parliamentary majority.

The Greeks are facing up to the fact that if they abandon the euro and go back to the drachma, they will face a short term a period of chaos in which the civil service system would have no money and the banking system could go down the tubes.

The National Bank of Greece added to this atmosphere by publishing a 17 page study on Tuesday predicting a 50% rise in unemployment and a more than 50% drop in per capita income, should Greece exit the euro. These woes would be compounded by hyperinflation.

New Democracy leader Anthonis Samaras warned his countrymen that they should not look to Argentina as an example. Argentina had defaulted on its debts and had recovered its economic position, but then Argentina had beef and wheat that it could readily sell on the global market. Greece does not have any comparable products.

Not surprisingly, an overwhelming majority of Greeks, according to the polls, want to stay in the euro zone and feel part of Europe.

This is the policy of even the Coalition of the Radical Left (SYRIZA) that has tried to convince voters that they can have the best of both worlds and keep the euro while jettisoning austerity.

The Democratic Left Party, that insisted on SYRIZA participation in a coalition, thus forcing new elections, is beginning to back away from that position. Now the party's leader Fotis Kouvelis claims that it will continue to support SYRIZA only if it receives a guarantee that it wants to stay in the euro. After staying in the euro, the second red line would be a gradual disengagement from the bailout terms.

Kouvelis pointed out that the European position is already evolving and was no longer fixated on austerity. It now incorporated combating youth unemployment and stimulating growth - two big pluses for Greece. It is clear that he is already positioning his party to shift gears following the June elections and join New Democracy and PASOK.