Meet Greece’s new economic policymakers

Varoufakis

With the Greek far left set to take power after Sunday’s staggering parliamentary elections, its next prime minister Alexis Tspiras will be just one of many key figures who will now become the central players in the latest chapter of the European Union’s economic policy debate.Greece Flag Icon

After Tspiras, no one will be more important than the economic advisers to whom the new government will entrust its attempt to reverse Greek economic policy and to negotiate debt relief from skeptical European Union leaders and international bondholders.

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RELATED: EU should give Tsipras a chance to govern

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Among the chief economic advisers to Tsipras and the soon-to-be-governing SYRIZA (the Coalition of the Radical Left, Συνασπισμός Ριζοσπαστικής Αριστεράς) are a handful of colorful personalities, from moderates to Marxists, all of whom will shape Greek economic policy in the years ahead.

Varoufakis: the political neophyte and telegenic economics professor

Yanis Varoufakis, an economics professor at the University of Athens, is widely tipped to become Greece’s next finance minister or, at the very least, lead the new government in negotiations with the troika — the European Central Bank, European Commission and the International Monetary Fund — and other EU leaders. Until very recently, Varoufakis was an outsider to Greek politics. He’s not a politician and, until recently, was a visiting professor at the University of Texas in Austin.

Varoufakis, however, was invited to run for a parliamentary seat by SYRIZA’s leaders. His international profile (Varoufakisis half Australian) and fluent English skills mean that he could soothe international markets as the chief economic spokesperson for Greece’s new government. A former adviser to George Papandreou in the early 2000s, Varoukakis has been a strident critic of the austerity measures that, first Papandreou and, since 2012, outgoing prime minister Antonis Samaras have accepted as conditions for Greece’s two bailouts, totaling €240 billion. In his announcement that he would stand as a candidate for the Hellenic Parliament, he compared that austerity to ‘fiscal waterboarding’:

Instead of discussing, in the European Union’s fora, the nature of our systemic crisis, the powers-that-be were busy fiscally waterboarding proud nations, letting them take a few short breaths before submerging them again into the waters of illiquidity.

Somewhat unusually for a European finance minister, Varoufakis has not shied away from criticizing the United States. Three years ago, Varoufakis wrote a book, The Global Minotaur, that paints a menacing portrait of the role of US economic policy vis-à-vis the rest of the world and American workers. Continue reading Meet Greece’s new economic policymakers

EU should give Tsipras a chance to govern

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With his sweeping victory today in Greece, Alexis Tspiras has led the far left to its only victory since his country’s return to democratic rule in 1974.Greece Flag Icon

In so doing, Tsipras (pictured above) and the socialist SYRIZA (the Coalition of the Radical Left, Συνασπισμός Ριζοσπαστικής Αριστεράς) have upended the political order in a country that, for more than four decades, shifted between the rule of political elites on both the center-right and the center-left, often hailing from two or three dozen well-connected families. Tsipras’s victory today is as much the defeat of that Greek political elite on both the left and right, which cumulatively share responsibility for irresponsible budget policies and widespread corruption in government.

More recently, they have also shared responsibility for the Greek bailout that ceded significant control over Greek fiscal policy to the ‘troika’ of the International Monetary Fund, the European Central Bank and the European Commission. Center-left prime minister George Papandreou (himself the son of a prime minister) accepted the first bailout in his term, between 2009 and 2011. Since 2012, a grand coalition headed by center-right prime minister Antonis Samaras and center-left deputy prime minister Evangelos Venizelos, have also accepted the increasingly onerous demands of the troika in exchange for the funding that has floated Greece’s treasury since the eurozone crisis of 2010.

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RELATED: What to expect from Greece’s January 25 snap elections

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Tsipras, at age 40, emerged in the lead-up to the 2012 parliamentary elections, by consolidating support on the Greek left in his denunciations of the grinding course of austerity that accompanied Greece’s humiliating bailout. Then, Greece was only in its third consecutive year of recession and, remarkably, the unemployment rate was actually lower then (24.8%) than it is today (25.8%), with the country nominally back on the path to GDP growth.

But for all the smoke of the election campaign, and for all Tsipras’s fiery rhetoric, the reality is that Tsipras and SYRIZA have spent the past three years moderating their positions and preparing for the day when Tspiras would lead the next Greek government, which may prove more ‘pragmatic left’ than ‘radical left.’

In 2012, Tspiras was ambivalent (at best) about Greece’s eurozone membership. Today, however, Tspiras is adamant, along with a wide majority of the Greek electorate, that Greece must retain the single currency. Whereas SYRIZA once mused about defaulting on greek debt and ripping up the ‘memorandum’ of stipulations that governs the country’s two bailouts, which totals €240 billion, the party now pledges to renegotiate Greece’s debt burden with EU leaders in an orderly manner. Though Tspiras and other SYRIZA leaders are committed to reversing the grinding austerity of the past six years, they will seek to do so in the context of a balanced budget (as opposed to the 4% to 5% surplus that outgoing prime minister Antonis Samaras hoped to achieve).

Tsipras, in short, will govern more like a social democrat than a democratic socialist. As prime minister, with the full weight on government on his shoulders, Tspiras will be hard-pressed to deliver appreciable relief from six years of austerity, recession and unemployment. To devote more funding for public services and boost growth will require a very different skill set than the campaign oratory of the past three years.  Continue reading EU should give Tsipras a chance to govern

Photo of the day: Obama meets Modi

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The most incredible thing about US president Barack Obama’s most recent three-day trip to India, which began today, is that Indian prime minister Narendra Modi can pull off such a sincere welcome less than six weeks after citing Russia as India’s top defense partner, even as he and Obama would later announce a new US-India nuclear energy deal.India Flag Icon

Has any world leader had such a strong first nine months in office from a geopolitical strategic perspective?

Keep in mind that Modi, barred from the United States for nearly a decade due to his alleged role in the anti-Muslim riots in his home state of Gujarat, was not always particularly keen on strengthening relationships with the United States. Instead, on the basis of his work promoting Gujarat, it was always more likely that he would look to China, Japan, Russia and the United Arab Emirates, where he wooed investment to his own state. With his emphasis on turfing out the corrupt and ineffective leadership of the Gandhi family, and with relatively little commentary on India’s foreign policy, no one expected Modi to build so many bridges in such little time.

Within just nine months, Modi has been the guest of honor at a state dinner at the White House, and he packed Madison Square Garden, filled with tens of thousands of North Americans of Indian descent thrilled to hear from India’s most powerful leader in three decades. By all accounts, Modi and Obama have developed a strong working relationship, unique for an American president who isn’t particularly known for his chemistry with world leaders.

Today, however, Modi has the grin of a prime minister, who, despite a decade as a pariah throughout much of the West, now revels in being suited by everyone — not just the United States and Russia, but China, Brazil, Japan, Europeans, Africans. In foreign policy, Modi is running a positive-sum game. What other countries in the world could manage to nurture such close relationships, strategic and otherwise, with Russia and the United States simultaneously? (Serbia, maybe? The United Arab Emirates? The list isn’t incredibly long.)

Modi, whose social media use has been nimble, was quick to post a photo of his warm welcome for Obama early Sunday morning. But one look at his Facebook and Twitter feeds, which often border on the campy side, show that he doesn’t just delight in Obama — in 2015 alone, he’s featured shots with German finance minister Wolfgang Schäuble,  Israeli agriculture minister Yair Shamir, Astrakhan provincial governor Alexander Zhilkin, Iranian presidential adviser Akbar Torkan, Canadian immigration minister Chris Alexander, Macedonian prime minister Nikola Gruevski, among many (many) others.

What’s becoming clear is that while Modi has taken only a gradual approach to reforming India’s government, slowly introducing changes to make the bureaucracy more efficient, the theme of Indian pride is constant in the Modi approach to both domestic and foreign policy. Continue reading Photo of the day: Obama meets Modi