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Greek election results: Tsipras and streamlined SYRIZA return to power

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Alexis Tspiras’s victory in Sunday’s snap elections in Greece is reminiscent of Richard Wagner’s four-opera marathon Ring cycle — at the end of hours of drama, the ring ends up more or less right where it began, with the Rhinemaidens.Greece Flag Icon

So it was in Greece, where voters have faced a tumultuous eight months under the first Tsipras government that began when Tspiras led the fiercely anti-austerity SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς) to a near-landslide win in January’s parliamentary elections.

Influenced by hardline academic Yanis Varoufakis, his initial finance minister, Tsipras tried (and failed) to extract concessions from European lenders with respect to the often harsh conditions tied to Greece’s first two bailouts. Back in January, Tsipras promised Greek voters that he would reduce the country’s austerity conditions while keeping Greece within the eurozone. However, with a looming default to the International Monetary Fund in late June, Tsipras called a July 5 referendum to give voters a chance to weigh in on the terms that eurozone finance ministers were offering Greece in exchange for extending its second bailout.

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RELATED: Why this weekend’s election in Greece doesn’t really matter

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Though Tsipras won a resounding “No/Oxi” against the bailout deal, the political victory came at a cost. His government was forced to introduce capital controls within hours of calling the referendum,  and Greece officially defaulted on its IMF payment. During the nine-day referendum campaign, Greece’s financial condition deteriorated so much that Greece faced its most serious risk in five years of being pushed out of the eurozone. Dismissing Varoufakis in favor of the more moderate Euclid Tsakalotos, Tsipras reversed course and ultimately entered talks for a third bailout of €86 billion, with at least a vague, face-saving promise to consider debt relief later this year. The new bailout, in turn, led to a massive rebellion within SYRIZA, so much so that Tsipras needed opposition support to enact the key parliamentary votes on the third bailout. By the end of the summer, former energy minister Panagiotis Lafazanis and 24 far-left SYRIZA MPs, including the fiery parliamentary speaker Zoe Konstantopoulou, split into a new party, Popular Unity (LE, Λαϊκή Ενότητα), dedicated to reintroducing the drachma.

As a result, Tsipras called snap elections for September 20 as a way of winning an electoral mandate for his considerable volte face and as a way of consolidating his control over the increasingly centrist SYRIZA, purged of its far-left wing.

So, after all of that, what happened?

Not much. Despite a turnout that was around 800,000 lower than in January, the end result was a Hellenic parliament that now looks almost exactly the same as it did when Tsipras resigned late last month to call elections. Defying polls that showed SYRIZA tied with the center-right New Democracy (ND, Νέα Δημοκρατία), Tsipras’s party (newly purged of its anti-bailout rebels) defeated ND by a margin of over 7% — SYRIZA lost just 0.88% support versus the January result, ND gained merely 0.29%.

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That was enough for SYRIZA to win 145 seats, just a loss of four from January, and strong enough that Tsipras will continue to govern with the same junior partner,  the ‘anti-austerity,’ right-wing nationalist Independent Greeks (ANEL, Ανεξάρτητοι Έλληνες). Despite fears that ANEL’s support would fall below the 3% threshold to enter parliament, the party cleared the hurdle and will lose just seven seats.

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Together, it’s enough for a fragile majority, but the best news for Tsipras is that the SYRIZA rebels in Popular Unity fell just short of the 3% hurdle.

What does that mean for Greece’s future? Continue reading Greek election results: Tsipras and streamlined SYRIZA return to power

Why this weekend’s election in Greece doesn’t really matter

meimarakis-tsipras-Photo credit to International Balkan News Agency.

In the televised debate earlier this week, Greece’s recent prime minister Alexis Tsipras dismissed the idea of a grand coalition as ‘unnatural,’ arguing that Greek voters would have to choose between a progressive coalition or a conservative coalition.Greece Flag Icon

Tsipras, however, is wrong.

Greek voters aren’t choosing much of anything at all. Greece is essentially now a fiscal ward of the eurozone’s finance ministers, and the next Greek parliament’s composition will not be much different than the current one, a mix of left-wing and right-wing legislators who committed to implementing the EU-mandated bailout program, despite their misgivings, because the alternative would be much worse.

Whether the recent prime minister Alexis Tsipras, leader of SYRIZA (Συνασπισμός Ριζοσπαστικής Αριστεράς, the Coalition of the Radical Left), or the opposition leader Vangelis Meimarakis (pictured above, left, with Tsipras), head of conservative  New Democracy (ND, Νέα Δημοκρατία) leads that effort doesn’t actually matter all that much.

In substance, it’s the choice between orange-flavored sorbet or tangerine-flavored sorbet.

Neither leader will truly be in charge of Greece’s fiscal policy, because that is already being set by eurozone finance ministers in Brussels and Berlin. The best that the next prime minister can hope for is some form of debt relief — eurozone leaders will discuss the matter in October, and economists believe that some form of debt relief (even if that just means extending Greece’s repayment period) will be necessary, despite strident political opposition in countries like Germany, Finland and The Netherlands.

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RELATED: Greece to vote in September snap elections

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The election is now a dead heat — polls show that the Tsipras-led rump of SYRIZA is essentially tied with New Democracy. Though the 300-member Hellenic Parliament is generally determined by proportional representation, the winner of Sunday’s election gains a ‘bonus’ of 50 seats, so even a narrow win means a windfall for the first-placed party.

But the question is chiefly one of style and symbolism — and which leader the electorate believes can lead Greece through the bailout in the most efficient and painless manner in light of the constraints any government will face in charting its own fiscal policy course. Continue reading Why this weekend’s election in Greece doesn’t really matter

Greece to vote in September snap elections

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Ballot-worn and crisis-weary Greeks will go to the polls for the third time in nine months in what amounts to a fresh referendum on the country’s third European bailout.Greece Flag Icon

Facing a growing insurgency in his own government as he implements the terms of a new European Union-backed bailout of up to €96 billion, prime minister Alexis Tsipras will dissolve the Hellenic Parliament and call early elections for September 20 — in an autumn where Turkey, just across the Aegean Sea, is also likely to hold snap elections after the apparent failure of coalition talks.

There’s already been a disproportionately large amount of ink spilled on poor Greece in 2015. With the first disbursement of the country’s third bailout accomplished, though, there’s probably no better time for Tsipras to go to the electorate. The early expectation is that Tsipras will survive the elections and govern with a more stable and likely centrist majority. But if you’ve learned anything about Greek politics this year, it’s that you should expect the unexpected twists and turns of a country that’s struggling culturally, economically and politically to exit crisis mode.

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RELATED: Both Greece and Turkey could be headed
for autumn snap elections

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From anti-austerity crusade in January to a third bailout in July 

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Tsipras (pictured above), the leader of SYRIZA (Συνασπισμός Ριζοσπαστικής Αριστεράς, the Coalition of the Radical Left), won election in January on a pledge to reduce the terms of Greece’s memorandum and provide relief from the effects of a half-decade of austerity imposed on Greece’s fiscal policy — all without endangering Greek membership in the eurozone. After months of talks, headed by his outspoken one-time finance minister Yanis Varoufakis, it became clear that Greece did not have the political leverage that Tsipras hoped would force a more lenient deal for his country. By the end of June, it was clear that the eurozone’s finance ministers had no appetite for extending Greece’s second bailout program without additional concessions to cut Greece’s still-bloated public sector and to reform its economy.

Tsipras then hastily called a referendum for July 5, campaigning against the latest deal on offer by the Europeans, and the ‘no’ campaign (‘oxi‘) won a stronger-than-expected victory, despite closing Greece’s banks and imposing capital controls that restricted daily ATM withdrawals, at their nadir, to just €60.

Despite the referendum, Tsipras returned to the negotiating table and ultimately accepted a proposal for the third bailout — with terms even tougher than those rejected in the July 5 referendum. Tsipras, who dismissed Varoufakis as his finance minister hours after the referendum, argued that Greece had to choose between two tough choices — austerity tied to yet another bailout program or the insolvency and financial chaos that would result from a disorderly exit from the eurozone. Tsipras essentially admitted at the time that he had no ‘plan B,’ and that his country lacked the foreign reserves to establish a new currency in the event of ‘Grexit.’

Leftist rebels increasingly split from SYRIZA over bailout

SYRIZA, until recently a loose coalition of leftists ranging from mildly anti-austerity centrists to former communists, almost immediately split over whether to accept the third bailout, in spite of the chaotic alternative. In particular, Varoufakis and then-energy minister Panagiotis Lafazanis, the leader of Left Platform (Αριστερή Πλάτφορμα), have been vocal critics of the deal, and parliamentary speaker Zoe Konstantopoulou attacked it vociferously in several key votes.

For the past month, however, Tsipras has pushed through the terms of the third bailout with dwindling support from his own party, and opposition MPs have kept his government and the bailout afloat. SYRIZA controls 149 of 300 seats in the parliament, and its junior governing partner, the nationalist right-wing and anti-austerity Independent Greeks (ANEL, Ανεξάρτητοι Έλληνες), control just 13 more seats. But by last week, support from within Tsipras’s coalition dropped to below 120.

Ultimately, Tsipras wants to call snap elections because he can’t function indefinitely with a government that refuses to deliver him a majority. By calling a fresh vote, Tsipras hopes to win a mandate for his new approach and for the new bailout program, though even Tsipras himself has grumbled that its terms will continue to retard Greek GDP growth and employment, keeping Greece stuck in its six-year economic depression.

There are no reliable August polls, but surveys from the summer show that SYRIZA, under Tsipras’s leadership, still commands a massive majority of around 40% compared to just 20% for the center-right opposition, New Democracy (ND, Νέα Δημοκρατία).

But we have no polls that show what might happen if, as seems likely, Left Platform splits formally from SYRIZA. This is a crucial question because the party that wins the most votes in an election also wins a ‘bonus’ of 50 MPs. So if Left Platform steals a significant share of SYRIZA’s voters, another third party — most likely New Democracy — could win the election with a much smaller share of the vote.

Tsipras is a wily campaigner, though, and he should benefit from the fact that for the first six months of his premiership, he engaged in substantial brinksmanship in pursuit of a better deal for Greece.

He failed.

So the challenge for Varoufakis and Left Platform will be to describe how they would otherwise succeed — and how a eurozone exit would make life easier for Greece’s poor and its shrinking middle class. After all, Varoufakis and Lafazanis were key players in Tspiras’s government until July. At some point, voters will realize that the SYRIZA rebels have little more to offer than Greece’s Communist Party (KKE, Κομμουνιστικό Κόμμα Ελλάδας), which won only 5.5% in the January election. Tspiras, having followed Varoufakis’s advice, brought his country to the edge of Grexit. Tsipras will argue that Left Platform and the Greek Communists offer no solution that will keep Greece in the eurozone, and he’ll have the political scars of the last six months to prove it.

The state of Greece’s center-right and center-left opposition

Ultimately, however, Tsipras’s greatest threat may come from the right, which encompasses not just the traditional Greek right, but the center and the center-left as well. They will argue that Tsipras’s hardball negotiation tactics not only failed, but needlessly disrupted a nascent economic recovery and led to the flight of billions of deposits from Greek banks. And that’s not incorrect. But Tsipras will argue that, unlike his predecessors, conservative Antonis Samaras and leftist George Papandreou, he fought for Greek sovereignty in the face of the eurozone’s unelected officials and tried to reintroduce the democratic voice of the Greek people into the debate over Greece’s economic future.

Moreover, by calling snap elections so soon, Tsipras also hopes he can win a mandate before even more economic pain befalls voters from the additional pension cuts and an increase in Greece’s VAT required under the new bailout.

With former prime minister Antonis Samaras’s resignation after the July referendum, New Democracy has removed one of the most toxic figures in Greek politics from its leadership. But its acting leader, Vangelis Meimarakis, in office for six weeks, hardly seems prepared for the sudden challenge of unseating Tsipras. Nor does Fofi Gennimata, the leader of Greece’s once-dominant center-left party, PASOK (Panhellenic Socialist Movement — Πανελλήνιο Σοσιαλιστικό Κίνημα). She’s held the PASOK leadership only since June 14.

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Tsipras’s most credible opponent will be centrist Stavros Theodorakis, a former television reporter and commentator who founded To Potami (Το Ποτάμι, which means ‘The River’), a centrist, pro-European party, in February 2014. Theodorakis (pictured above) harshly condemned Tsipras’s decision to call a referendum over extending Greece’s bailout, but he has nevertheless supported Tsipras’s efforts to enact Greece’s new bailout since mid-July. As a more pragmatic and centrist ‘Tsipras 2.0’ is emerging, the distance between him and Theodorakis is shrinking.

If Tsipras wins, that means he will look towards To Potami as a coalition partner in his next government; until then, however, he will be fighting with Theodorakis over the same pool of centrist and center-left voters.

Though the Independent Greeks have backed Tsipras throughout the ups and downs of the last seven months, it’s not clear how such an anti-austerity party will hold onto its support after having embraced a new bailout memorandum. Its leader, defense minister Panos Kammenos, could face an uphill battle in selling the bailout deal. If ANEL collapses, however, it could be to the gain of Golden Dawn (Χρυσή Αυγή), a eurosceptic, anti-bailout, anti-immigrant and neo-fascist group that vies with To Potami for third place in the polls, typically with between 5% and 8% support.

As Schäuble sneers, Greeks agree four-month debt deal

schaublePhoto credit to Bloomberg News.

If you want to know which side ‘thinks it won’ in today’s temporary deal between Greece and the Eurogroup, you need look no further than the extraordinary statement from German finance minister Wolfgang Schäuble, who essentially spiked the ball in Greece’s face after winning a key concession from its new anti-austerity government that it would honor existing Greek commitments to its creditors in exchange for a four-month extension of its bailout program:Greece Flag Icon

“Being in government is a date with reality, and reality is often not as nice as a dream,” the conservative veteran said, stressing Athens would get no aid payments until its bailout program was properly completed. “The Greeks certainly will have a difficult time to explain the deal to their voters.”

Even if you think the Greek government had little leverage to force the Eurogroup to accept its demands and even if you think today’s temporary deal is at least a step on the path to a stronger Greece within the eurozone, I can’t think of a statement from any European leader more at odds with reality and basic political acumen since the out-of-touch musings of former French president Valéry Giscard d’Estaing in 2004 and 2005, when he was in charge of the process to enact a constitution for the European Union, a process that died when France itself rejected the constitution in a referendum.

It’s as if Schäuble (pictured above with Greek finance minister Yanis Varoufakis) actively wants to feed the notion that Germany dominates European policymaking. His comments might play well in Munich or Stuttgart, but they’ll be poisonous in Madrid and Athens, and cause some amount of indignation in capitals like Paris and Dublin. 

Imagine a different response, whereby German chancellor Angela Merkel delivered a statement that, even while holding steady against concessions to the Greek government, acknowledged Greece’s economic suffering and acknowledged that the Berlin-led bailouts have caused more harm than anticipated — an admission, by the way, that the International Monetary Fund was already making years ago.

A German Europe, and a divided Europe

Greece is in a depression that’s now lasted six years and runs deeper than the Great Depression of the 1930s in either Europe or the United States. Unemployment is rife in Spain, so much so that an untested anti-austerity group, Podemos, now leads polls for the general election later this year. Italy, for now, has placed its trust in its young Tuscan prime minister Matteo Renzi, who seems to have far more commitment to reform than ability to carry it out. Romania and Bulgaria, despite responsible budget policies, are being hollowed out by depopulation and migration to wealthier EU countries.

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RELATED: What a Eurogroup-brokered deal with Greece might look like

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Europe’s best and brightest are leaving economically depressed regions and countries, and they’re heading to London. To Amsterdam. To Frankfurt. That’s left national governments responsible for fiscal commitments to social welfare, education and health care. While its most ambitious citizens look abroad for careers, these national governments find their revenues shrinking and their obligations increasing. Continue reading As Schäuble sneers, Greeks agree four-month debt deal

Seven lessons from the Greek election results

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Greece’s voters have effected a political earthquake in making leftist Alexis Tspiras their new prime minister, delivering a near-majority to the far-left and giving the European Union its first full-throated anti-austerity government since the onset of the eurozone’s sovereign debt crisis in 2009-10.Greece Flag Icon

Tsipras’s party, SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς), is now the most left-wing governing party in the European Union and, with the exception of economist Yiannis Dragasakis, who served as deputy finance minister in a short-lived technocratic government a quarter-century ago, it’s a party with no significant governing experience.

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hellenicparliamentDespite a 50-seat ‘winner’s bonus’ for SYRIZA, which significantly outpolled New Democracy, the party fell just short of an outright majority in Greece’s unicameral Hellenic Parliament (Βουλή των Ελλήνων). Earlier, today, however, Tsipras announced that he would form an alliance with the Independent Greeks (ANEL, Ανεξάρτητοι Έλληνες), an anti-austerity spinoff from New Democracy. Its leader, Panos Kammenos, last week scoffed that Europe is governed by ‘neo-Nazi Germans,’ and he is something of a loose cannon on the Greek political scene, and he has sometimes veered toward nationalist and even anti-Semitic rhetoric. Like Tsipras, he has brutally denounced the conditions of Greece’s two bailouts over the past half-decade, but he agrees on little else with the country’s new leftist prime minister.

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RELATED: EU should give Tsipras a chance to govern

RELATED: Meet Greece’s new economic policymakers

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So what should you make of the fast-moving events in Greece and the aftermath of Sunday’s elections? Here are seven key lessons.

Continue reading Seven lessons from the Greek election results

Merkel’s incredibly stupid New Year Grexit bluff

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It’s understandable why German chancellor Angela Merkel doesn’t want to cut any deals with Greece — no matter who wins the snap elections later this month.Greece Flag IconGermany Flag Icon

Making concessions, especially to a far-left, anti-austerity figure like potential prime minister Alexis Tspiras, could embolden every recession-weary country from Portugal to Romania to demand relief from Brussels and Berlin, and it could give substantive figures on the European left, including Italian prime minister Matteo Renzi, French president François Hollande and even German social democrats in Merkel’s own grand coalition, a platform to doubt the Berlin-dominated approach to fiscal policy throughout the eurozone.

According to Merkel (pictured above, right, with incumbent Greek prime minister Antonis Samaras) and much of the German electorate, the troika of the European Commission, the European Central Bank and the International Monetary Fund has already been too soft on Greece, lowering the interest on over €240 million in bailout funds and extending the repayment schedule.

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

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Nevertheless, it’s incredible that Merkel and her aides take such a cavalier attitude to a potential Greek eurozone exit, which they apparently haven’t ruled out in the event that Tsipras’s leftist SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς) wins national elections in 18 days. Three years after ECB president Mario Draghi promised to do ‘whatever it takes’ to save the eurozone, Merkel now believes that Greece is expendable, that the eurozone is no longer subject to the domino theory that would make a ‘Grexit’ calamitous and that the eurozone is now governed by a chain theory that suggests a Greece-less eurozone will be rid of its weakest link.

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It may be smart domestic politics in Germany, where the anti-euro Alternative für Deutschland (Alternative for Germany) is gaining support on Merkel’s right flank in both state and federal politics, but it’s an incredibly tin-eared intrusion three weeks before Greeks vote. It certainly won’t help the beleaguered coalition government of center-right, pro-bailout prime minister Antonis Samaras, whose New Democracy (Νέα Δημοκρατία) narrowly trails SYRIZA in most polls. Greeks already realize that a vote for Tsipras (pictured above) brings with it greater uncertainty, so Samaras has some hope that the electorate will have doubts about handing power to SYRIZA. He certainly doesn’t need Merkel to make that point for him.  Continue reading Merkel’s incredibly stupid New Year Grexit bluff

What to expect from Greece’s January 25 snap elections

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With the failure of Greece’s parliament to elect a president after a third and final vote this morning, prime minister Antonis Samaras will dissolve the parliament and schedule early elections — most likely on January 25.Greece Flag Icon

It will be the first election since June 2012, when Samaras’s center-right New Democracy (Νέα Δημοκρατία) narrowly defeated the hard-left SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς). According to just about every poll, SYRIZA holds a lead of between 3% and 7% against New Democracy.

Expect a tough Samaras-Tsipras fight for first place

Samaras is a wily and seasoned campaigner, and he will undoubtedly cast himself as the guardian of Greece’s long-term stability. On Monday morning, he was lashing out at ‘political terrorism,’ and warning that a SYRIZA victory would allow Greece’s sacrifices to go to waste. SYRIZA will face sustained criticism — some justified, some overblown — from just about every quarter in Europe that it and its leader, Alexis Tspiras, are dangerous ideologues whose policies could force Greece out of the eurozone in 2015. Already, publications like The Guardian are referring to Greece being ‘plunged into crisis.’ Expect the fear-mongering about the consequences of a SYRIZA victory to be on par with efforts by the British political establishment and business community in the fraught week leading up to the Scottish independence referendum. It’s by no means certain that SYRIZA’s narrow single-digit lead will survive that kind of onslaught.

The fight between SYRIZA and New Democracy is so important because the first-place finisher in the election will not only win the largest share of seats in the 300-member Hellenic Parliament (Βουλή των Ελλήνων), but also a 50-seat ‘bonus’ meant to provide the winning party with enough seats to form a working majority government. Over the next few days, it will be worth watching to see whether SYRIZA or New Democracy convince any other smaller parties to merge, because the marginal value of even a one-vote victory in Greek elections is so consequential.

Since 2012, Greek economic conditions are slightly improved. Greece’s GDP is set to grow by between 1.0% and 1.4% in 2014, following six consecutive years of contraction, and there’s every reason to believe it will continue to expand in 2015. The government even attempted a reasonably successful bond sale in April, and Greece’s staggering unemployment rate is now just 25.7%, down from its high of 28%.

Nevertheless, the dual cuts of budget austerity and economic depression have, understandably perhaps, left the Greek electorate weary of renewing a mandate for austerity, and the uncertainty over the country’s political future has pushed 10-year bond yields to an unsustainable 8.5%.

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Greece’s ‘bailout’ questions remain unsolved

Fueling that uncertainty is Greece’s planned exit from its bailout program in February 2015, just days after the election.

Continue reading What to expect from Greece’s January 25 snap elections

Greek parliament prepares for 3rd and final presidential vote

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In the second of three presidential votes, the Greek parliament failed to elect the government’s center-right choice for president, Stavros Dimas (pictured above), a former foreign minister and European Commission member, in voting on Tuesday.Greece Flag Icon

Though it was the second time that Greek prime minister Antonis Samaras, both failures were expected, given that Dimas needed 200 votes in the 300-member Hellenic Parliament (Βουλή των Ελλήνων) in order to win the presidency outright in either of the first two rounds. That threshold drops to just 180 votes in the third and final round that will take place next Monday, December 29. Samaras is waging an all-out campaign over the weekend to convince enough legislators to support Dimas and, by extension, his government.

Dimas won just 160 votes in the first round, but Samaras, who governs a coalition that includes his own center-right New Democracy (Νέα Δημοκρατία) and its traditional center-left rival, PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα), increased that total to 168 in the second vote after winning over a handful of independents.

If the Hellenic Parliament fails to elect a new president, Greece will hold snap elections next spring and New Democracy might lose, as polls currently suggest, to the hard-left SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς). That could put Greece’s financial future in doubt as SYRIZA’s leader, Alexis Tsipras, pledges to reverse the austerity measures of the past six years and negotiate a bond haircut to lower the country’s debt burden, from the ‘troika’ of the European Commission, the European Central Bank and the International Monetary Fund that provided Greece two bailouts worth €110 billion and €130 billion, starting in June 2010. 

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RELATED: Markets shouldn’t be freaking out about Greek elections

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Samaras starts with the existing ND-PASOK governing coalition, which controls 155 votes, there’s a theoretical bank of 46 additional votes, including 24 independents, 12 legislators from  Panos Kammenos’s Independent Greeks (ANEL, Ανεξάρτητοι Έλληνες), an anti-austerity spinoff from New Democracy and 10 additional legislators from the Democratic Left (DIMAR, Δημοκρατική Αριστερά), a new social democratic party and SYRIZA spinoff that joined Samaras’s coalition between the June 2012 elections and June 2013 (when it eventually withdrew to the opposition in the face of further austerity measures). Though DIMAR leader Fotis Kouvelis has indicated he will support SYRIZA’s call for early elections and will support a SYRIZA-led government, not all of the party’s members agree. Negotiations with the Independent Greeks have been equally tenuous, and one of its members accused the government of attempting to bribe him in exchange for his support in the presidential vote.

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Snap elections would coincide with the end of Greece’s bailout program in February 2015. The the next Greek government already faces a €22 billion budget shortfall between 2015 and 2016. Among the solutions currently under discussion is a short-term credit line from the troika or the IMF, though the troika is already demanding additional wage cuts and other fiscal contraction as part of the deal. Another potential solution might be to extend the repayment period by 20 years, equivalent to writing off around €50 billion in debt. Continue reading Greek parliament prepares for 3rd and final presidential vote

Markets shouldn’t be freaking out about Greek elections

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It’s not surprising that Greek investors would be spooked by the idea of political turmoil that could replace Greece’s center-right coalition government with a radical leftist one as soon as February.Greece Flag Icon

That possibility became much more likely yesterday, when Greek prime minister Antonis Samaras brought forward a presidential election to replace Karolos Papoulias, the 85-year-old incumbent and a founder of PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα), Greece’s traditional center-left party, whose second five-year term was due to expire in March 2015. Greece’s presidency, a chiefly ceremonial office like in many European parliamentary systems, is determined indirectly by the Hellenic Parliament (Βουλή των Ελλήνων), not directly through national elections.

Samaras’s decision only moves up the presidential vote by two months. Samaras leads a coalition government of his own center-right New Democracy (Νέα Δημοκρατία) and its former rival PASOK. If the coalition fails to elect a president, it will trigger the government’s collapse, bringing forward parliamentary elections that would otherwise take place in June 2016.

The prospect of early elections and the possibility that SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς) and its charismatic leader, Alexis Tsipras (pictured above), could be running Greece’s economic policy within weeks was enough to send the Athens stock exchange tumbling by 12.78% on Tuesday, the largest single-day drop since 1987, as analysts went berserk explaining that a potential SYRIZA victory could spell doom not just to the European but to the global economy:

“Greece in the next 6 weeks may prove to be more important for global markets than Russia/Ukraine was in 2014,” said Charles Robertson, chief economist at Renaissance Capital. “A possible [SYRIZA] election victory may force the eurozone to choose between a fiscal union (debt write off for Greece) or the first Euro exit.”

Though voters might be weary of seven years of economic pain, Greece’s economy is actually growing at one of the highest rates in the eurozone, which is struggling with low growth and deflationary pressure. At a time when most Europeans have reason to be wary of 2015, Greeks should be confident that their economy has bottomed out, and employment and GDP growth should continue to improve in 2015 and beyond. In the long-term perspective, it’s a great time for stronger investment in Greece, not panic and divestment.

There’s reason to believe that Tsipras, once in power, would act responsibly. SYRIZA, and not PASOK, is now the standard bearer of the opposition left in Greece, but Tsipras has moderated some of his more firebrand positions. Though he is arguably the loudest critics of eurozone austerity, he is more solicitous of the investor class today than he’s ever been. Tsipras still wants to restructure Greece’s public debt (still a staggering 174% of GDP) by forcing a renegotiation that could lead to a haircut or other modification. Tsipras and his economic advisers have nevertheless committed a potential SYRIZA government to budget discipline, even while promising to ameliorate the worst of the drastic cuts to social welfare spending required under the terms of Greece’s two bailouts worth €110 billion and €130 billion, respectively, from the ‘troika’ of the European Central Bank, the European Commission and the International Monetary Fund. Reassuringly, however, Tsipras has essentially promised he will not default on Greek debt and he will not attempt to leave the eurozone. 

Tsipiras is probably correct that Greece’s debt burden is not sustainable. He’s also probably right that Brussels and Berlin would cave to renegotiating that debt if the alternative is a return to the ‘Grexit’ speculation and the financial market turmoil of 2012 when the ECB is trying to wage its own fight to expand the central bank’s reflationary ‘quantitative easing’ efforts. The upside for Tsipras, if he wins a new election, is that SYRIZA would likely take credit for Greece’s economic progress just as it’s beginning to emerge from the nadir of its recessionary cycle.

Continue reading Markets shouldn’t be freaking out about Greek elections

An interview with Greek-German MEP Jorgo Chatzimarkakis

Chatzimarkakis

If there’s anyone in European politics who straddles the line between the two cultural realities of Europe today, it’s Jorgo Chatzimarkakis.European_UnionGermany Flag IconGreece Flag Icon

Born in 1966 to Greek migrants in the Ruhr Valley, in what was then West Germany, Chatzimarkakis has served for the past 10 years as a member of the European Parliament from Germany’s liberal Freie Demokratische Partei (FDP, Free Democratic Party). 

Over the course of the past five years, that’s put Chatzimarkakis in one of the most unique roles of any European policymaker. As a German MEP, he belonged to a party that was one of the most outspoken critics of using German funds for what seemed, at the heart of the eurozone’s sovereign debt crisis, like an endless number of bailouts for troubled European economies, including Greece’s.

But as an MEP of Greek descent,  Chatzimarkakis also understood the emotional and social toll of the economic crisis from the other perspective, in light of the pain Greece continues to suffer due to the bailout — often referred to in Greece simply as the ‘memorandum,’ in reference to the Memorandum of Understanding that sets out the terms of the Greek bailout with the ‘troika’ of the European Central Bank, the European Commission and the International Monetary Fund.

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RELATED: In-Depth: European parliamentary elections

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Though the bailout program has kept Greece inside the eurozone, it’s come at a huge cost. The conditions Greece accepted in exchange for the loan program required tough budget cuts, tax increases, and reduced state salaries and pensions, exacerbating an economic downturn that, for Greece, has now developed into a full-blown depression. Unemployment is still nearly 27%, youth unemployment is even higher, and the Greek economy has contracted for six consecutive years:

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Cuts to education, health care and other programs have strained the Greek social fabric, civil strife and strikes are seemingly endless, and politician violence has increased. The neo-fascist Golden Dawn (Χρυσή Αυγή) is now the third-largest party in the Hellenic Parliament, despite the efforts of the current national government to prosecute many of its leaders. Though Greece’s economy may expand this year, for the first time since 2007, it’s clear that the effects of the downturn will reverberate for years to come.

In the 2014 European elections, Chatzimarkakis is running for the European Parliament in Greece, having formed a new political party, the Hellenic European Citizens (Έλληνες Ευρωπαίοι Πολίτες).  Continue reading An interview with Greek-German MEP Jorgo Chatzimarkakis

A rogues’ gallery of the EU’s top 13 eurosceptic parties

skepticismAs voters in 28 European countries prepare to head to the polls, beginning on May 22 and running through May 25, no one knows whether Europe’s center-left or center-right will win more seats, and no one knows who will ultimately become the next president of the European Commission.European_Union

But the one thing upon which almost everyone agrees is that Europe’s various eurosceptic parties are set for a huge victory — not enough seats to determine the outcomes of EU legislation and policymaker, perhaps, but enough to form a strong, if disunited, bloc of relatively anti-federalist voices. Voters, chiefly in the United Kingdom, France and Italy, are set to cast strong protest votes that could elect more than 100 eurosceptic MEPs.

In some countries, such as Spain, euroscepticism is still a limited force the center-left opposition Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party) is tied for the lead with the governing center-right Partido Popular (the PP, or the People’s Party) of prime minister Mariano Rajoy. But Spain is quickly becoming an outlier as eurosceptic parties are springing up in places where unionist sentiment once ran strong.

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RELATED: In Depth: European parliamentary elections
RELATED: The European parliamentary elections are really four contests

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Of course, not all eurosceptics are created equally. Some anti-Europe parties have been around for decades, while others weren’t even in existence at the time of the last elections in 2009. Some are virulently xenophobic, far-right or even neo-Nazi in their outlooks, while others are cognizably on the more mainstream conservative / leftist ideological spectrum. Some seek nothing short of their country’s withdrawal from the European Union altogether, while others seek greater controls on immigration. Some are even pro-Europe in the abstract, but oppose eurozone membership. That’s one of the reasons why eurosceptics have had so much trouble uniting across national lines — the mildest eurosceptic parties abhor the xenophobes, for example.

If everyone acknowledges that eurosceptic parties will do well when the votes are all counted on Sunday, no one knows whether that represents a peak of anti-Europe support, given the still tepid economy and high unemployment across the eurozone, or whether it’s part of a trend that will continue to grow in 2019 and 2024.

With 100 seats or so in the European Parliament, eurosceptics can’t cause very many problems. They can make noise, and they stage protests, but they won’t hold up the EU parliamentary agenda. With 200 or even 250 seats, though, they could cause real damage. There’s no rule that says that eurosceptics can’t one day win the largest block of EP seats, especially so long as most European voters ignore Europe-wide elections or treat them as an opportunity to protest unpopular national government.

For now, though, they’re all bound to cause plenty of trouble for their more mainstream rivals at the national level, and in at least five countries, they could wind up with the largest share of the vote. So it’s still worth paying attention to them.

Without further ado, here are the top 13 eurosceptic parties to keep an eye on as the results are announced on Sunday:

Continue reading A rogues’ gallery of the EU’s top 13 eurosceptic parties

Cracking down on Golden Dawn’s leadership is a risky strategy for the Greek government

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Over the course of the past week, the Greek government stepped up its efforts to treat Greece’s hard-right, neo-fascist party, Golden Dawn (Χρυσή Αυγή) with the kind of speed and clarity that one rarely sees in Athens.Greece Flag Icon

Those efforts follow the stabbing of anti-fascist hip-hop artist Pavlos Fyssas over a week ago, which marked a turning point for the coalition government that center-right prime minister Antonis Samaras leads.  Greek authorities over the weekend arrested Golden Dawn’s leader Nikos Michaloliakos (pictured above) and other party members, including party spokesman Ilias Kassidiairis, on charges of belonging to a criminal organization.  It was an unprecedented action in Greece’s post-dictatorship democracy — the first time since 1974 that MPs, let alone a party head, were arrested.

But things took an awkward turn on Wednesday when three of the Golden Dawn MPs (but not Michaloliakos) arrested were released pending trial, adding to doubts that Samaras’s government is making the right choice in suddenly treating Golden Dawn as more of a criminal organization than a political organization, however vile its organizing beliefs.  Kassidiaris (more on him here) did himself no favors by kicking and pushing members of the media upon his release Wednesday.

Support was already crashing for Golden Dawn in the wake of the murder — the party dropped from winning around 13% support in polls to just around 6% or 7% last week in the aftermath of the Fyssas murder.  In real terms, that means that Golden Dawn would no longer be the third-largest party if elections were held in Greece tomorrow.  After winning 6.92% in the previous June 2012 elections, Golden Dawn currently holds 18 seats in the 300-seat Hellenic Parliament (Βουλή των Ελλήνων), and the party had been threatening to resign en masse, leading to distracting by-elections.  Golden Dawn, which began as a ‘nationalist socialist’ magazine in 1980, comprised mostly of misfit supporters of the right-wing military junta that ruled Greece between 1967 and 1974, was a very minor presence in Greek political life before — until Greece’s economy plunged into contraction, unemployment, misery and social discord over the past four years.  (Read more background on the group’s history here.)

If you want to understand why Golden Dawn’s popularity has ballooned, check out the trajectory of the Greek economy from growth to severe depression over the past seven years:

greecegdpGolden Dawn was already growing into something more than a political party — a mutual aid society to provide food and other necessities (but only, of course, to ‘pure’ Greeks) and a near-paramilitary outfit that drew, according to some Greek analysts, the support of 50% of the Greek police forces.

But Golden Dawn’s polling collapse was, even before the crackdown, good news for Samaras — right-wing voters who had flirted with Golden Dawn seemed to be returning to Samaras’s more conventional conservative New Democracy (Νέα Δημοκρατία), which has boosted it once again over the anti-austerity, leftist SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς).  Before the latest drama in Greece, SYRIZA had eclipsed New Democracy in many polls, even as Greece faces the humiliating prospect of requesting a third bailout from the ‘troika’ of the European Central Bank, the European Commission and the International Monetary Fund.

So why would Samaras make this push now?  His sudden aggressive tack against Golden Dawn comes with the risk that Samaras will transform Michaloliakos and his party into martyrs, thereby boosting their support when they might have otherwise faded away as Greeks backed away from a group with such openly neo-Nazi leanings. Continue reading Cracking down on Golden Dawn’s leadership is a risky strategy for the Greek government

What kind of a deal can Greece expect after the German elections?

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Europe may be a non-issue in the German election campaign, but it’s becoming increasingly clear that Europe will occupy a chief role in the agenda of Germany’s next chancellor, perhaps more so than exclusively German domestic issues.Greece Flag IconGermany Flag Icon

Though center-right chancellor Angela Merkel and center-left challenger Peer Steinbrück are both stridently pro-Europe, it’s an open question how to next German government should deal with the poster-child of the European financial crisis — Greece.  To understand Germany’s options requires an understanding of the underlying Greek politics — and how a Greek political crisis could plunge the entire eurozone back into panic mode.

Even as Germany and the eurozone as a whole pulls out of the worst of the most recent recession, Greece continues to struggle with economic contraction.  The economy is set to shrink by between 4.5% to 5% this year, the unemployment rate is a staggering 27.6%, and this follows five consecutive years of recession capped off by a 7.1% contraction in 2011 and 6.4% contraction last year.  Greece remains trapped in a grueling internal devaluation where the private sector is being forced to accept leaner wages to make exports more competitive and the public sector is being forcibly downsized by the terms of the bailout programs agreed to by the ‘troika’ of the European Central Bank, the European Commission and the International Monetary Fund.  Greece today is not a fun place to live, and Greek voters are angry at Germany in particular for forcing so many Greeks into poverty and joblessness while doing little in terms of fiscal or monetary policy to boost the country’s medium-term growth prospects.

But German voters have their own narrative — while they’re still generally supportive of ever close union within Europe, they’re nonetheless wary of the European Union becoming a transfer union where wealth from German productivity flows to Greek profligacy.  That underlies the collective angst within the entire Germany political community late last month when Wolfgang Schäuble, Germany’s finance minister, indicated that Greece would require a third bailout — perhaps up to €11 billion, which is still a fraction of what the troika has already lent to Greece.  (For the record, Portugal’s government is also likely to require a second bailout of its own early next summer.)

Back in Greece, that means a politically radioactive set of negotiations at a time when Greece’s government is reeling.  A coalition between the two once-dominant parties since the return of Greek democracy in 1974, the center-right New Democracy (Νέα Δημοκρατία) and the center-left PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα) holds just a cumulative 155 seats, giving it the barest of majorities in Greece’s 300-member Hellenic Parliament.  After the disastrous shutdown of Greece’s public television station ERT in June, the anti-austerity Democratic Left (Δημοκρατική Αριστερά) left the governing coalition — its leader Fotis Kouvelis previously agreed to join the coalition after Greek’s June 2012 elections in order to provide more stability for the country.

Snap elections seem likely in any event sometime next year.  If elections were held today, SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς) seems likeliest to win them, according to a recent poll, making the young, massively anti-austerity opposition leader Alexis Tsipras Greece’s radical new prime minister.  The Sept. 11 Public Issue poll showed SYRIZA moving into first place with 29%, New Democracy with 28%, and the far-right, neo-fascist Golden Dawn (Χρυσή Αυγή) would win 13%.  PASOK, meanwhile, would fall to just 7%, the Greek Communist Party (KKE) would win 6.5%, the right-wing, anti-bailout Independent Greeks would win 5.5%, and the Democratic Left would win just 2.5%, less than the 3% threshold for entering parliament.

SYRIZA has essentially consolidated much of the support of the anti-austerity left, so it’s puzzling how PASOK still attracts even 7% support, given that it’s subjugated itself almost completely  to prime minister Antonis Samaras’s agenda.  But Golden Dawn’s support is rising, and it’s likely to pull support from increasingly frustrated right-wing voters that once supported New Democracy, suggesting that if economic conditions keep deteriorating, Golden Dawn could draw even more support to a largely xenophobic, nationalist agenda.

If those numbers held up in a new Greek election, Merkel and her colleagues in Paris, Brussels and other European capitals, would probably regard it as a disaster for Europe. Continue reading What kind of a deal can Greece expect after the German elections?

Italy’s problem with racism goes far deeper than recent slurs against Cécile Kyenge

letta-kyenge

It seems like barely a week goes by without another story coming out of Italy about another racial slur hurled at the Mediterranean country’s first black government minister, Cécile Kyenge. Italy Flag Icon

This week’s row comes from Roberto Calderoli, a member of the Lega Nord (Northern League), the autonomist right-wing party that has in the past allied itself with Silvio Berlusconi, though it’s not part of the current ‘grand coalition’ led by center-left prime minister Enrico Letta.

Calderoli, speaking over the weekend, railed against Kyenge, arguing that her success encourages ‘illegal immigrants’ to come to Italy, that she should be a minister ‘in her own country,’ and added this gem:

“I love animals – bears and wolves, as everyone knows – but when I see the pictures of Kyenge I cannot but think of, even if I’m not saying she is one, the features of an orangutan,” Mr Calderoli said in a speech to a rally in the northern city of Treviso on Saturday.

Calderoli’s comments were unthinkably crass but, unfortunately, they are not atypical in the three months since Kyenge came to power, nor are they incredibly out of the norm for a political culture that has long treated racism with a wink and a smile, such as when Berlusconi himself described Barack Obama, the first black president of the United States, as particularly ‘suntanned.’

Kyenge (pictured above with Letta), an Italian citizen who was born in Congo, came to Italy in 1983, when she set up a practice as a doctor in Modena, in the central Italian region of Emilia-Romagna.  Earlier this year, she was first elected to Italy’s Camera dei Deputati (Chamber of Deputies) as a member of Italy’s center-left Partito Democratico (PD, Democratic Party).  Letta appointed her as the government’s minister for integration, in part due to the work Kyenge has done since founding DAWA, an association designed to promote multicultural awareness in Italy and to foster cooperation between Italy and Africa.  Prior to becoming an Italian deputy, Kyenge served as a provincial councilor in Modena for four years, and she’s a proponent of a jus soli, a law that would grant citizenship to those children of immigrants who are born in Italy.

In short, Kyenge personifies a new kind of 21st century success story for first- and second-generation Europeans in a world where globalized ties are now bound to blur ethnic, racial, national and cultural borders.

It’s worth bearing in mind that this isn’t the first time Calderoli has been accused of racism or insensitivity.  He was forced to resign as a minister in a previous Berlusconi government in 2006 after purporting to wear a t-shirt showing the printed cartoons of a Danish newspaper depicting the prophet Mohammed.  (Having returned to a subsequent Berlusconi government a few years later, it was Calderoli who drafted the election law that now virtually everyone in Italy agrees is worthless).

Nor is it the first time Northern League politicians have made controversial statements about Kyenge — one of its local politicians earlier in June called for Kyenge to be raped, so she would understand how victims feel, and in April, another European Parliament member, Mario Borghezio, called her part of a ‘bonga, bonga government’ and argued that she wanted to ‘impose her tribal traditions from the Congo.’

Kyenge has accepted Calderoli’s begrudging apology, but it’s not even the only incident this week — members of the far-right Forza Nuova (New Force) party held an anti-immigration protest featuring nooses in Pescara in central Italy.

In the long run, it may well be that Kyenge’s graceful responses to unacceptably mean-spirited and racist comments convince more Italians that there’s no place for racism in Italian public discourse — she has the power to turn ugly incidents like Calderoli’s slur into what Obama himself might call a ‘teachable moment.’

But that task is made equally difficult by the integration portfolio that Kyenge holds, which means that she is responsible for policymaking on immigration and the nearly 4.5 million foreign residents who live in Italy.  Even as Kyenge tries to deflect tensions, Calderoli and other Northern League politicians may be using outbursts about Kyenge as a deliberate strategy to inject racial resentment as a potent political wedge issue.

Although migrants have been coming to Italy since the 1970s, which makes immigration to Italy a more recent phenomenon than in other European countries, about two-thirds of Italy’s current foreign residents have arrived in the past decade.  The net result is a country that hasn’t had time to develop the political or cultural institutions to cope with a very rapid influx of foreigners, let alone to develop the vocabulary of multiculturalism in a country that can be sometimes quite insular in a way that’s both profound and provincial, troubling and quaint Continue reading Italy’s problem with racism goes far deeper than recent slurs against Cécile Kyenge

Kouvelis, Democratic Left withdrawal from Greek government leaves precarious majority

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Just a little over a year after the second of two divisive elections in Greece, the smallest partner in the three-party governing coalition withdrew its support today — leaving Greece ever closer to new elections, though the government will continue on with a slim majority for now.Greece Flag Icon

Fotis Kouvelis, in announcing that his party, the Democratic Left (Δημοκρατική Αριστερά), would leave the coalition over the growing row related to the sudden closure of ERT, the national broadcaster, emphasized that Greece did not need new elections, and he indicated that the party would perhaps provide external support to what’s left of prime minister Antonis Samaras’s coalition to keep Greece on track with respect to the terms of its bailout program with the ‘troika’ of the European Commission, the European Central Bank and the International Monetary Fund.

What does that mean for Greece?

Though it’s true that the departure of the Democratic Left doesn’t necessarily mean new elections, it leaves the government in a precarious position.

Samaras’s New Democracy (Νέα Δημοκρατία), Greece’s longstanding center-right party, holds 125 seats in the 300-member Hellenic Parliament (Βουλή των Ελλήνων).  Its other coalition partner, PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα), Greece’s traditional center-left party, holds 28 seats.  Together, that gives the government an ostensible three-seat majority, though the 14 seats that Kouvelis delivered provided a wider margin for comfort over a year that’s seen Samaras’s government push forward with the fiscal adjustments mandated by the bailout program.

But more importantly, Kouvelis (pictured above, left, with Samaras in center background) delivered the votes of one of the two parties of the anti-bailout left, giving Samaras’s government a broader base and a credible claim to being somewhat of a unity government.

The Democratic Left formed only in 2010 when moderates split from the leftist SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς).  So while SYRIZA leader Alexis Tsipras is content to lead the opposition, Kouvelis and his party brought an outsized amount of legitimacy to Samaras’s government.  After all, both New Democracy and PASOK had backed Greece’s bailouts, and many voters have held the two parties, which switched back and forth in power in recent decades, especially responsible for Greece’s economic woes.

Their continued unpopularity is one reason why no one wants to risk elections anytime soon.  PASOK, in particular, has lost nearly all of its support among voters to the benefit of Tsipras and SYRIZA, which have given more muscular voice to the anti-bailout left.  If elections were held tomorrow, it’s not even certain that PASOK would pass the 3% threshold to win seats in the Hellenic Parliament.

One recent poll shows New Democracy holding onto a very narrow lead, with 21% to just 20.5% for SYRIZA.  In third place is the neo-fascist Golden Dawn (Χρυσή Αυγή) with a staggering 10.2%.  Greece’s far-left Communist Party (KKE) registered 5.7%, the center-right (but anti-bailout) Independent Greeks registered 5.2%.  PASOK won just 5.1%, and the Democratic Left won just 4.8%.

With such weak support, neither Samaras nor PASOK leader and former finance minister Evangelos Venizelos have an incentive to trigger new elections.  So while the chances that Greece will go to the polls for the third time in 12 months are slim, there’s no escaping the fact that the Democratic Left’s decision to leave the government is a setback for Samaras.  Continue reading Kouvelis, Democratic Left withdrawal from Greek government leaves precarious majority