Tag Archives: independent greeks

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.

Both Greece, Turkey could be headed for snap elections

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August may be among the most quiet periods of the year for world politics, especially in Europe as workers spend weeks away on holiday. Greece Flag IconTurkey

But events earlier this week made it very likely that two Mediterranean countries could hold snap elections later this year, adding greater political uncertainty to a European electoral calendar that will see elections for a new Labour leader in the United Kingdom next month, a new regional government in Catalunya (with implications for the Catalan independence movement) and new national governments in Portugal, Poland and Spain.

Greece’s troubled far-left government may call a vote of confidence as it begins implementing the country’s third bailout package, finalized with European leaders last weekend despite onerous conditions that could retard economic growth for years. The bailout and its aftermath could split prime minister Alexis Tsipras’s ruling SYRIZA (Συνασπισμός Ριζοσπαστικής Αριστεράς, the Coalition of the Radical Left). With far-left SYRIZA rebels already opposed to the bailout and with other opposition parties refusing to prop up Tsipras’s government, Greece could be forced to hold its second election since January, when SYRIZA first swept to power.

Across the Aegean Sea, Turkey may find itself forced to hold a repeat election after the ruling Adalet ve Kalkınma Partisi (AKP, the Justice and Development Party) of president Recep Tayyip Erdoğan and prime minister Ahmet Davutoğlu (pictured above) apparently failed to find common ground with Turkey’s two largest opposition parties, leaving it just shy of a majority in the Turkish parliament. Without a working majority, Erdoğan may be forced to call a new election by August 23, when Davutoğlu’s mandate to form a coalition government expires. Continue reading Both Greece, Turkey could be headed for snap elections

What are the chances of snap elections (again) in Greece?

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It’s a sign that fiscal affairs in Greece are bad when the sensible Plan B to cover the Greek government’s looming shortfall involves loans from Moscow (despite protests to the contrary).Greece Flag Icon

Greek prime minister Alexis Tsipras has dismissed European sanctions against Russia, and he met Russian president Vladimir Putin in Moscow earlier this week, signaling to the European Union that Greece is keeping its options open if ongoing debt talks fail. Though Tsipras didn’t seek any financial assistance from Putin, he failed to convince Putin to lift a ban on Greek agricultural exports.

The even more outlandish Plan B involves demanding reparations from Germany for World War II damages, amounting to €278.7 billion. Perhaps not coincidentally, that’s just a little more than the €240 billion in financing that Greece has received in the last half-decade under two bailout programs from the European Commission, the European Central Bank and the International Monetary Fund.

Today, Greece’s government, not even three months old, will repay a €460 million portion of its debt to the International Monetary Fund. But that doesn’t mean that all is well in Athens, where last year’s green shoots of economic recovery are now obscured by the uncertainty of a leftist administration that’s engaged in brinksmanship over Greece’s financing and, ultimately, over the wider question of national fiscal sovereignty in today’s eurozone.

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RELATED: EU should give Tsipras a chance to govern

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

RELATED: Seven lessons from the Greek election results

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 Why Tsipras can’t (and won’t) make a deal on Berlin’s terms

Without a deal, Tsipras will go down in history as the prime minister who led Greece out of the eurozone, willingly or not. Politically, however, Tspiras can’t agree to any deal that the Eurogroup seems to be offering. That’s increasingly a recipe for Tsipras to call fresh elections early this summer, but there’s no guarantee the results will solve the Greek-EU political quagmire.

Tsipras and his anti-austerity SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς) were elected three months ago on a pledge to renegotiate the terms of Greece’s debt with its European lenders and end the harsh austerity measures that have exacerbated Greece’s contracting economy and growing unemployment. But the EU’s leaders, including Commission president Jean-Claude Juncker, German chancellor Angela Merkel and, presumably, ECB president Mario Draghi, no longer fear the ‘contagion’ effect of a Greek eurozone exit.  Continue reading What are the chances of snap elections (again) in Greece?

What a Eurogroup-brokered deal with Greece might look like

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At times this week, it has felt nearly like the European Union was brokering a bailout of Ukrainian debt, while working to negotiate a ceasefire with Greece.European_UnionGreece Flag Icon

But as Greece’s new left-wing government and the Eurogroup, the collection of eurozone finance ministers, work over the weekend for a new Greek debt deal to float Greece’s treasury for the next two years (or thereabouts), there are glimmers of hope on both sides that a deal might possibly emerge. Negotiations continue as the February 28 deadline approaches, when Greece’s current bailout program is scheduled to end.

So what might that deal ultimately be? Above all, any deal that attempts to put Greece on a long-term path to prosperity needs to start from the notion that its debt burden of nearly 175% of GDP growth is simply unsustainable. You might not hear that in public from figures like German chancellor Angela Merkel, German finance minister Wolfgang Schäuble, European Commission president Jean-Claude Juncker or Eurogroup president and Dutch finance minister Jeroen Dijsselbloem, but it’s likely another story in private.

No matter how many cuts successive governments make to future budgets, the cost of servicing that debt will cripple its ability to provide the same level of public services to Greek citizens — especially at a time when unemployment remains so high. (Not everyone has the view, however, that the Greek debt burden is so incredibly unsustainable).

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RELATED: A Russian bailout may have always been Plan B for Tsipras

RELATED: Seven lessons from the Greek election results

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Here’s an outline of what to expect — perhaps as soon as early Monday morning: Continue reading What a Eurogroup-brokered deal with Greece might look like

A Russian bailout may have always been ‘Plan B’ for Tsipras

junckertsiprasPhoto credit to ELTOS/ELTA.

It may have seemed odd that, within hours of taking office, Greece’s new prime minister Alexis Tsipras struck out at the European Union to delay and ultimately weaken the bloc’s resolution to extend sanctions against Russia and certain actors within the Russian government.Greece Flag IconRussia Flag Icon

The incident shed light on an under-explored element of policy preferences of Greece’s new governing party, the leftist SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς), including its reluctance to embrace NATO and the traditional military and security alliance that links the United States and the European Union. Tspiras, who has visited the Kremlin several times, has forcefully opposed the EU sanctions against Russia stemming from its involvement in the unrest in eastern Ukraine.

Furthermore, Tsipras’s choice to form a coalition with the right-wing, anti-austerity Independent Greeks (ANEL, Ανεξάρτητοι Έλληνες), and to appoint ANEL’s leader, Panos Kammenos, as defense minister, brought into government a brand of right-wing nationalism with roots in traditional Greek Orthodoxy and plenty of euroscepticism.

Throughout the campaign and, indeed, for years, Tspiras has publicly evoked confidence, if not outright cockiness, that he would be able to negotiate a deal to lighten Greece’s debt load if elected to power. Presumably, many commentators believed that meant Tsipras was willing to engage EU elites, including German chancellor Angela Merkel, in a game of ‘chicken’ over Greece’s potential exit from the eurozone. That’s probably still true.

But the common view among most economists is that Greece’s leverage on this point is growing weaker. Merkel and others have privately briefed that the eurozone is much stronger now than in 2012 when the ‘Grexit’ issue first became a real concern, and they don’t believe that the contagion from a Grexit today would be considerable. Greece’s turmoil can be isolated, but caving to the demands of the Tsipras government could embolden radical leftists elsewhere in Europe, especially in Spain, where the leftist Podemos movement now leads polls in advance of elections later this =year. The European Central Bank last week essentially backed Merkel’s view by announcing that it would refuse to accept Greek bonds as collateral, pushing the burden of risk on Greek debt exclusively upon the Greek central bank. Greek finance minister Yanis Varoufakis clashed publicly with German finance minister Wolfgang Schäuble last week as well, noting that he didn’t even ‘agree to disagree’ with Schäuble over the Greek debt standoff.

But Kammenos’s comments yesterday about Greece’s ‘Plan B’ make it clear that the Tsipras government believes it has another, potentially more explosive card it can play:

“What we want is a deal. But if there is no deal – hopefully (there will be) – and if we see thatGermany remains rigid and wants to blow apart Europe, then we have the obligation to go to Plan B. Plan B is to get funding from another source,” he told a Greek television show that ran into early Tuesday. “It could the United States at best, it could be Russia, it could beChina or other countries,” he said.

The United States is certainly not going to undermine Merkel and the EU leadership, especially to bail out a far-left government in Greece. Furthermore, China’s recent history demonstrates that it very rarely makes splashy political moves in foreign policy outside regional Asian politics (such as in Bhutan or Sri Lanka).

That, of course, leaves Russia, which shares a common form of Christianity with Greece in Orthodoxy, and which also happens to be in the middle of the most high-stakes geopolitical struggle with NATO since the end of the Cold War. Continue reading A Russian bailout may have always been ‘Plan B’ for Tsipras

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

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

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

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