As Greece prepares to vote this weekend in its most important election in 50 years, there are some striking similarities with the events that took place at the other end of the European Union in Scotland four months ago.

 

Conventional politics is being challenged by a colourful and raucous uprising called "Syriza". This "coalition of the radical left" has brought social democratic, green and socialist groups together in a peaceful popular rebellion that has similarities with the Yes campaign in the independence referendum.

Syriza is a self consciously neo-nationalist movement, which trades heavily on issues of sovereignty and identity. It doesn't want the national agenda becoming the preserve of the far-right Golden Dawn. As one of Syriza's prominent intellectuals, Professor Costas Douzinas, put it recently: "The left must redifine the meaning of patriotism and rescue it from the racists".

It seems to work. In the closing days of the campaign, Syriza is increasing its lead in the opinion polls, plunging the Greek financial and political establishment into full panic mode. Syriza is not the communist revolutionary movement presented in the conservative press, but its anti-austerity policies could lead to Greece defaulting on its sovereign debt and leaving the euro.

There is a studied vagueness to the policies offered by Syriza's charismatic leader, Alexis Tsipras, to deal with the debt crisis and costly public services. He says his party is "social democratic" and accepts membership of the EU and the euro, and the need ultimately for a balanced budget. However, he is also pledging a restoration of the minimum wage, free health care and subsidised housing.

The outgoing conservative prime minister, Antonis Samaras of New Democracy, warns that, if Greece says yes to Syriza, it will plunge into deeper debt and will suffer a flight of funds that will force even deeper cuts in public spending. Greece will end up like Venezuela, he says, a banana republic ejected from Europe. Shades of Better Together's vision for Scotland.

However, Greek voters are so disgusted with establishment politicians, and with bankers and eurocrats, that they seem minded to give Syriza a chance. Certainly, they feel things could hardly get much worse. Greece remains in the grip of mass unemployment with 50 per cent of young people out of work. Its economy has shrunk by nearly one third in the past five years and wages and salaries have fallen by 26 per cent in real terms since 2010.

On almost any index you care to mention (GDP per head, labour productivity, earnings) Greece has suffered a profound economic crisis of the kind normally associated with a war. The middle classes have been impoverished, with many professionals finding they are little better off than the urban poor.

As in Scotland, there are widespread complaints that the media is biased. Greek voters are abandoning the mainstream press and turning to alternative channels of communication online. In working class areas where there has been little faith in the electoral process in recent decades, mass registration campaigns have built Syriza from practically nothing in 2009 to a party preparing for government.

As the hours tick by, there are last-minute attempts by the banking "Troika" (the EU, the European Central Bank and the International Monetary Fund) to pull Greece back from the brink. Today, Mario Draghi the boss of the European Central Bank, will announce a new round of bond purchases being heralded as a final adoption by the EU and the IMF of "quantitative easing" - money printing to you and me - to address deflation in Europe.

The basic problem is that Europe is stuck in a depression similar to that in America in the 1930s but lacks the political will and the federal institutions needed to introduce the kind of expansionist policies of Roosevelt's New Deal. Greece has been a guinea pig for the conservative alternative of "internal deflation", restructuring the economy by slashing salaries and public spending rather than extending public borrowing.

Syriza says it wants to remain in Europe and the single currency if possible. But it is demanding what is in effect a default on Greek national debt that many economists believe is incompatible with continued euro membership. Mind you, economists have been predicting "Grexit" for four years and it hasn't happened yet.

The irony is that Greece may be about to default at the very moment it has apparently turned an important financial corner. The Greek crash was a classic sovereign debt crisis: the cost of borrowing soared to more than 11 per cent, meaning that the Greek government could not meet the interest payments loans worth almost 200 per cent of GDP. There simply wasn't enough being raised in taxes and the country seemed to be in a deflationary death spiral.

Following successive ECB bail outs, Greek debt is actually rather cheap and the cost of servicing it is only four per cent of GDP. Greece is growing faster than Britain, at 3.7 per cent, and will record a primary budget surplus this year for the first time in decades. Its recovery is putting the rest of the EU to shame.

The problem however, remains the 340bn euro debt overhang Greece has no prospect of paying off in the foreseeable future. This could bring recovery to a halt. Syriza is calling for half of this to be written off in a debt conciliation conference similar to the ones convened in the aftermath of the Second World War. Some economists outside Greece think it is not an unreasonable call.

If Alexis Tsipiras enters government this weekend, in coalition perhaps with one of the other centre-left parties, his government could be in a strong position to talk tough with the EU. The threat of a Grexit might be enough to persuade Europe's bankers, essentially Germany, to write off perhaps 30 per cent of the debt.

The Troika could disguise this as yet another bail out. Greece has had at least three. Countries like Ireland, which never defaulted, and Finland, which fears moral hazard, might complain. Germany would have to shoulder much of the cost. But Angela Merkel, the German Chancellor, does not want the euro to break up in case the EU collapses in turn.

Everyone accepts that the pain inflicted on Greece in the past four years has been morally unacceptable and politically unsustainable in a democracy. This could be a turning point for European social democracy, and an end to austerity. And all because of this upstart Syriza, written off as a joke only four years ago.

Many former Scottish independence activists would love to emulate the success of Syriza. But we shouldn't get carried away here. The big difference between Greece and Scotland, and the main reason the Yes campaign lost here, is that Scotland's economy, despite what was said by some in the Better Together campaign, is in a vastly better place than Greece's. Scotland's middle classes felt they had a lot to lose by leaving the UK. It was homeowners and older voters who saved the day for the Union.

But what Greece also shows is that radical politics can rapidly become mainstream, provided it is peaceful, imaginative and non-sectarian. The support of the Greek middle classes is the reason Alexis Tsipras is odds-on favourite to become prime minister. Without them, it won't happen.