The Greek bond fiasco is now in the past - clipped investors licking their wounds while the government awaits the first installment of the $170 billion bailout.

But just as importantly for the country going forward will be elections - now anticipated sometime in April - that will tell the tale whether the Greeks will stick to the stiff austerity program imposed upon it by the EU, or whether they will risk a total default and reject the pain.

Reuters:

Greek Finance Minister Evangelos Venizelos formally submitted his candidacy to lead the Socialist PASOK party on Saturday, as the focus in Athens shifted to elections expected once an international bailout deal is cleared.

Greece averted the immediate threat of an uncontrolled default on Thursday when it successfully concluded a bond swap deal under which private sector creditors agreed to accept deep cuts in the value of their holdings.

"There is now more than just recession, budget cuts and tax increases ... there's the hope to turn the wheel of growth," he told a party conference.

In a sharp reminder of the deep unpopularity of the austerity measures he has overseen, a pensioner on crutches hurled yoghurt at the burly Venizelos just before his speech, forcing him to delay his appearance to change clothes.

Venizelos, the dominant figure in the party since his appointment to the finance portfolio by former Prime Minister George Papandreou last year, is expected to win PASOK's leadership comfortably in an internal vote on March 18.

However opinion polls show the Socialists far behind the conservative New Democracy party ahead of elections expected by mid-May at the latest.

Both PASOK and New Democracy are in the coalition government headed by former central banker Lucas Papademos but have been openly jockeying for position in the runup to the elections, which may not produce a clear winner.

The socialists and conservatives - strange bedfellows and partners in austerity - will no doubt be forced to once again form some kind of coalition government. Neither side dares criticize the other for the austerity plan since both parties signed off on it already.

More problematic will be gains by the communists and far right parties who will not be bound by any convention against lifting the austerity measures. That will only complicate matters - if such a thing is possible - and throw the nation into even more turmoil.

The bond swap was only a first step. Given the minefield Greek politicians must traverse over the next several months, there isn't much optimism that a full blown default can be avoided.