The victory of the far-left Syriza party in the Greek general election did not take many observers by surprise. The party had been leading in the opinion polls for quite some time and the austerity measures imposed by the outgoing government had caused a lot of hardship among many voters.
Syriza leader Alexis Tspiras, Greece’s new Prime Minister, was elected on a platform to scrap austerity measures and renegotiate the country’s €240 billion bailout with the European Union, the International Monetary Fund and the European Central Bank (the so-called ‘troika’).
Syriza obtained 149 seats in the 300-seat Parliament, just short of an overall majority, and formed a coalition government with the right-wing Independent Greeks party. The new coalition partners are odd bedfellows indeed and have nothing in common except that they are both anti-austerity.
Tspiras is a former member of the Communist Youth who declined a religious ceremony when he was sworn in as Prime Minister, while Panos Kammenos, the leader of the Independent Greeks, who is now Defence Minister in the new government, is a religious, conservative economist who has a hardline attitude towards immigration. It will be interesting to see how long this alliance can last.
Syriza got 36.34 per cent of the popular vote, a substantial increase from the 26.89 per cent it received at the 2012 election, and as the largest party was awarded 50 additional bonus seats. Contrary to public perception there was no massive swing away from the centre-right New Democracy led by former prime minister Antonis Samaras, which saw its share of the vote decline only slightly from 29.66 per cent to 27.81 per cent.
Where then, did Syriza’s new support come from? The answer is without doubt from some of the smaller parties, which saw a substantial decrease in their share of the vote. Pasok, the once dominant party of the left, obtained just 4.68 per cent of the vote, compared to 12.28 per cent three years ago; the right-wing Independent Greeks party saw its vote go down from 7.52 per cent to 4.75 per cent; and the Democratic Left, made up of dissidents from Syriza and Pasok, was wiped out – it got 0.49 per cent compared to 6.25 per cent.
Of the other small parties, the neo-Nazi Golden Dawn saw its share of the vote decline marginally from 6.92 per cent to 6.28 per cent, but worryingly it ended up the third largest party in Greece, and the Communist Party increased its share of the vote slightly from 4.50 per cent to 5.47 per cent. Two new parties, the centrist Poumi, and the Movement of Democratic Socialists – set up by former prime minister George Papandreou after he split from Pasok – received 6.05 per cent and 2.46 per cent of the vote respectively.
Papandreou’s party failed to reach the required three per cent threshold for parliamentary representation.
The stakes are certainly high for both the EU and Greece as the two sides try and find a compromise over Athens’ demands for an end to austerity measures and a renegotiation of the country’s debt.
If an agreement cannot be reached, it is no exaggeration to say that Greece could be forced out of the eurozone by the end of the year. This is in nobody’s interest but I believe that Greece has more to lose by such an outcome.
While a few years ago the possibility of a Greek exit from the eurozone was of great concern to Brussels and Berlin, I think the EU is today better prepared for such an eventuality. Europe has had time to get ready for this scenario, and has taken a number of precautions to this effect.
I honestly believe that the EU would prefer for Greece to remain in the eurozone – an exit might encourage other members to believe it is acceptable to leave the single currency – but it is not prepared to keep Greece in at any cost.
On the other hand, Greece would suffer tremendously if it had to replace the euro with the drachma. Such a scenario would probably lead to an even sharper turn to the left by Syriza, such as mass nationalisations, capital control and massive government involvement in the economy. Greece would become a Venezuela in Europe, but hopefully it won’t come to that.
Years of overspending, poor tax collection and having a bloated public sector led to the near collapse of the Greek economy, which had to be rescued by the international community. In return for the €240 billion international bailout, the ‘troika’ demanded stringent austerity measures to restructure the Greek economy, which undoubtedly reduced many people to poverty and caused a great deal of hardship. Furthermore, many people doubt whether it is actually possible for Greece to pay off its debt.
The EU is not prepared to keep Greece in the eurozone at any cost
Greece’s economic figures are depressing: the average wage is €600 a month, unemployment is at 25 per cent, with youth unemployment almost 50 per cent, the economy has shrunk by 25 per cent since the start of the eurozone crisis and the country’s debt is 175 per cent of GDP.
There was slight economic growth in 2014 but this was little consolation to the many people hard hit by crisis.
So what can be done? Prime Minister Tspiras told his first Cabinet meeting that Greece would not default on its debts but that a renegotiation of such debt would aim for a “viable, fair, mutually beneficial solution”. What exactly that means remains to be seen.
However, most EU member states are reluctant to accept a write-off of Greece’s debt, for a number of reasons. German Chancellor Angela Merkel, for one, would face massive criticism from members of her own party as well as the eurosceptic Alternative for Germany party.
Furthermore, should Syriza’s demands be accepted this would only serve to encourage other radical populist parties in Europe, such as Spain’s Podemos.
Also, the feeling in much of Europe is that other countries should not be made to pay the price for another country’s gross mismanagement.
The bottom line is that both Athens and Brussels will have to compromise, but realistically speaking it will be Prime Minister Tsipras who will have to make the most concessions, especially if he wants Greece to remain in the eurozone.
Economic reforms must continue, even if some are revised, but rejecting all the measures imposed in connection with the country’s bailouts is absolute nonsense. The EU, on the other hand, should react positively to signs of moderation and pragmatism from Syriza, and hopefully a programme can be agreed to by which debt repayments become affordable to Athens.
Regarding foreign policy I hope the new Greek government will opt for continuity. However, the first foreign envoy Tsipras met as Prime Minister was the Russian Ambassador, and last Tuesday Greece distanced itself from a strongly-worded joint statement by EU leaders on the escalating violence in Ukraine and the threat of further sanctions.
Nevertheless, last Thursday during a meeting of EU foreign ministers, the Greek government agreed to impose more sanctions against Russia, while defending its right to shape EU foreign policy. So common sense seems to have prevailed.