Syriza press HQ during the election. Flickr/Marcos. Some rights reserved.

In his victory speech to jubilant crowds in central Athens on Sunday evening, Syriza's leader Alexis Tsipras called for the sun of 'justice, democracy and dignity' to come back to Greece.

Moving quickly, by Monday morning, Tsipras had done a deal with Panos Kammenos leader of the right wing Independent Greeks to form a government – with Syriza on its own being just short of an overall majority in parliament.

No one doubts the scale of the challenges the new Greek government now faces. But in the face of democratic alienation and loss of trust across Europe, and in the face of perverse and destructive economic policies creating damaged societies and lost generations, it is as Tsipras repeatedly said in his speech a moment of hope – not just for Greece but for all of Europe.

Europe in denial

Greece has probably experienced the most destructive social, economic and political impacts of the euro crisis and the austerity policies introduced in its wake – with unemployment at 25%, youth unemployment at over twice that, and the social fabric tearing ever more deeply over the last five years. Yet across southern Europe through Italy, Spain, Portugal and into France, high levels of youth and general unemployment have been created over the last five to seven years as failed economic policies have been grimly stuck to – in Italy youth unemployment hovers around 44%, in Spain around 56%. Public services and infrastructure, have crumbled in the face of austerity cutbacks; politics has fractured.

Germany's Chancellor Angela Merkel, and other eurozone leaders, have continued despite this to defend the euro tenaciously through these crisis years as the heart of the European project (to the bemusement of British politicians who only ever saw the EU as a trade bloc). Yet the biggest betrayal of the European project and damage to stability, peace and democracy in the EU has surely been the creation of a Europe where young people are denied jobs and hope. Half of a young generation in a whole swathe of countries remain unable to work, earn a living, use their skills, creativity and education.

A turning point?

Will the Syriza victory mark a turning point? Greece is a small member state in a large EU where the northern paymasters in Germany, the Netherlands, Finland and elsewhere demand total capitulation to their misguided economics as the price for their bailouts. Just over three years ago, in November 2011, Merkel and then French President Nikolas Sarkozy infamously, and with sweeping disregard for democracy and national sovereignty, pressured then Greek Prime Minister George Papandreou into withdrawing his proposed referendum which would have let the Greek people have a say on the austerity measures (although with no alternative offered).

But in the face of a sweeping democratic victory by Syriza, there is now a stand-off – and will certainly be negotiations – over Greece's debt and austerity policies.

One or two politicians, including Finnish leader Alexander Stubb, have hinted at some possible flexibility in extending the maturity of Greece's debt. But allowing Greece's economy and society to breathe and prosper again will need much more than that. Germany has been intransigent in the years of the euro crisis, firmly attached to its neo-liberal policies of balanced budgets and cuts – in total denial in the face of leading economists and politicians (from the right as well as left) pointing out that the eurozone is suffering from a major lack of demand.

Cracks have been showing in the façade of agreement in these economic policies – with the European Central Bank's Mario Draghi belatedly launching a policy of quantitative easing last week, and Commission President Jean Claude Juncker attempting (but inadequately) to kick start €300 billion of investment in the EU. Francois Hollande, struggling with France's own failing economy, has welcomed Tsipras' victory.

But Angela Merkel is not going to change tack now – and her policies are supported by most of the German population – with Germany least damaged by the euro crisis, its public debate almost untouched by the political and economic devastation wreaked across southern Europe. The question is can Merkel completely deride and ignore the sweeping democratic verdict in Greece on the failure of the euro crisis measures? There will at least be talks – but the negotiations over whether, how and how much to change Greece's bailout deal will be tough and the outcome hard to predict.

Greek and European renewal?

Syriza have also been clear that they will not only renegotiate Greece's debt but reverse some of the most damaging austerity measures in Greece. They have also declared they will finally take the battle to Greece's wealthy oligarch elites, who have presided over corruption and economic decay while protecting their own wealth and influence. This will be as hard, if not more so, than negotiating with the EU institutions and the IMF.

Yet for now, Syriza have brought some hope back to Greece, and even to the European Union. It has been striking through the years of the euro crisis that the majority of the public – from Greece to Spain, Portugal and Ireland – have wanted to remain in the euro. The idea of being part of a European space is one that people in most EU countries still subscribe to (if not in the UK, and with eurosceptic movements growing even in Germany). Yet European politics has become much more volatile, with growing political alienation and apathy, with the rise of the far right in Greece, France, Italy and elsewhere, a real warning that failed economic policies have real political consequences.

The EU's most powerful leaders in Berlin, Frankfurt and Brussels have ignored the deeply damaging political, social and economic impacts of their failed crisis management on the EU's member states and on the EU itself. Syriza's victory – and the rapid growth of Podemos in Spain, the extraordinarily high turnout in Scotland's recent referendum – all these show that people can and will engage with politics, with hope. If they succeed in shifting Greece's and the EU's path towards one of hope, they will be the ones who will have rescued the EU from itself, and started a return to genuine democracy and sane economic policies.

Europe continues to live in interesting times, but Tsipras, and Syriza, have injected some new hope. The challenge to all the EU's politicians is to build on that not destroy it.