Tag Archives: syriza

Spain heads toward fresh elections on June 26

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Pedro Sánchez, the leader of the Spanish Socialist Workers’ Party, could fall if his party drops to third place in June. (Facebook)

Shortly after the December general election, I wrote that Spain faced three possible choices — a German-style grand coalition, a Portuguese-style ‘coalition of the left’ or a Greek-style stalemate and fresh elections. Spain_Flag_Icon

Spain chose the Greek option.

Five months after a national election ripped apart Spain’s decades-long two-party system, the failure of the country’s four major parties to reach a coalition agreement means that Spain’s voters will once again go to the polls on June 26 for a fresh vote, after a deadline ran out on midnight Tuesday to find a viable government.

Notably, the rerun of Spain’s national elections will fall just three days after the United Kingdom votes on whether to leave the European Union, a critical vote for the entire continent.

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The problem is that, with talks stalled for any conceivable governing majority, the Spanish electorate seems set to repeat results similar to last December’s election. For now, markets are not unduly spooked by the political impasse in Madrid, but continued uncertainty through the second half of 2016 could prove different if no clear government emerges from the new elections and, presumably, a new round of coalition talks brokered by Spain’s young new king, Felipe VI.

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RELATED: Three choices for new fractured political landscape

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So who are the four major parties and how do they stand heading into the June vote? Continue reading Spain heads toward fresh elections on June 26

Spain readies for historic, four-way election on December 20

Spain's new young king, Felipe VI, may ultimately shape his country's new country from the Palacio Real if the unprecedented four-way race leaves no party with a majority after December 20.
Spain’s new young king, Felipe VI, may ultimately shape his country’s future from the Palacio Real if the unprecedented four-way race leaves no party with a majority after December 20.

Five days before the Christmas holiday, Spanish voters will go to the polls to choose a new government in an election that’s being hailed as the country’s most important since 1982.Spain_Flag_Icon

Indeed, voter turnout may well exceed the 80% levels not seen since 1982, when Spain had only just emerged from its Francoist dictatorship and was four years away from joining the European Economic Community, the predecessor to today’s European Union. Moreover, it will also be the first general election to take place under Felipe VI, whose father Juan Carlos I abdicated in June 2014 after guiding the country’s transition to democracy in the mid-1970s.

But what makes the December 20 election so unique is that economic crisis has shattered Spain’s stable two-party electoral tradition, leaving a four-way free-for-all that could force unwieldy coalitions or a minority government at a time when the country has only just started its economic recovery. Distrust in both major parties, moreover, has opened the way for a popular far-left movement at the national level and greater discord at the regional level, most notably in Catalonia, where support for the independence movement is growing. No matter who wins power in the eurozone’s fourth-largest economy, the next Spanish government will face difficult decisions about GDP growth, lingering unemployment, and federalism and possible constitutional change.

For decades, Spanish elections were essentially, at the national level, a fight between the conservative Partido Popular (PP, the People’s Party) and the center-left Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party). In the most recent 2011 election, the PP won 186 seats in the 350-member Congreso de los Diputados (Congress of Deputies), the Spanish parliament’s lower house, while the PSOE won 110 seats.

Both parties can point to massive successes over the past three decades. Under longtime PSOE prime minister Felipe González, Spain consolidated its liberal democracy and benefited greatly from closer economic and financial ties to Europe, while Barcelona’s emergence as the host of the 1992 Summer Olympics catapulted it into a world-class city. Under conservative prime minister José María Aznar, Spain joined the core of western European countries as a founding member of the eurozone in 2002 and developed widening security ties with the United States. When the PSOE returned to power in 2004 under José Luis Rodríguez Zapatero, the government enacted same-sex marriage in 2005 and later negotiated a peaceful ceasefire with the paramilitary Basque nationalist group Euskadi Ta Askatasuna (ETA).

The pain in Spain

Widespread anti-austerity protests, spearheaded by the 'indignados' movements mobilized even before the previous elections in 2011. (El País / Carlos Rosillo)
Widespread anti-austerity protests, spearheaded by the ‘indignados’ movements mobilized even before the previous elections in 2011. (El País / Carlos Rosillo)

But the global financial crisis of 2008-09 and subsequent eurozone crisis of 2010 knocked Spain off its pedestal.

Not unlike Florida, Nevada and parts of California in the United States, property values in Spain fell as rapidly as they once climbed, and an economy driven by construction and easy credit sputtered to near-depression levels of contraction. Despite running a more parsimonious fiscal policy in the 2000s than even Germany, Zapatero’s government soon found its expenses far exceeding revenues, and his government engaged in a series of tax increases and spending cuts.

The Spanish electorate ousted Zapatero in December 2011, ushering the People’s Party back to power under Mariano Rajoy, whose main goal was to prevent Spain from needing to seek an emergency bailout. Despite some scares over the Spanish banking system in 2012, Rajoy succeeded in keeping Spain bailout-free, but at the cost of ever greater spending cuts and tax hikes. The Rajoy government’s tough fiscal medicine, to some degree, has worked. Yields on Spanish 10-year debt have steadily fallen from a high of over 7.2% in July 2012 to less than 1.8% today. For a country without economic expansion since 2008, the Spanish economy returned to fragile growth in 2014, and it maintained growth throughout 2015 — notching 1% growth in the second quarter of this year and 0.8% in the third.

But voters are not enthusiastic about the prospects of reelecting Rajoy, a leader who never quite managed to win over Spanish hearts. Spain’s unemployment rate today is still 21.2%, a drop from the record-high 26.9% level recorded in early 2013. But that’s still a far higher jobless rate than anywhere else in the European Union (with the exception of Greece).

In the 2008 election, before the bottom fell out of the Spanish economy, the two major parties together won 83.8% of the vote. By 2011, that percentage fell to 73.4%. If polls are correct, that percentage could fall below 50% on Sunday, as both the PP and the PSOE struggle against the surging popularity of the anti-austerity Podemos (‘We can’) on the left and the liberal, federalist Ciudadanos (C’s, Citizens) on the right.

If the election were held today, the PP would win around 110 seats, the PSOE around  90, and Podemos and Ciudadanos would each win around 60, leaving none of them with a clear majority. The uncertainty of the four-way race has both energized the electorate (in  a manner reminiscent to those first early elections in the post-dictatorship era) and enhanced the chances of post-election uncertainty that both Greece and Portugal have endured this year.  Continue reading Spain readies for historic, four-way election on December 20

What’s at stake in this weekend’s Catalan regional elections

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If September 2014 was the month when Scottish independence made global headlines, it might be September 2015 when Catalan independence has its breakthrough — at least if regional president Artur Mas has his way. cataloniaSpain_Flag_Icon

Barely 10 months after Catalonia’s regional government held a non-binding referendum on independence, and just three months before the Spanish general election, Catalan voters will elect a new regional parliament in a campaign that Mas has been waging for months as a de facto referendum on the region’s future status within — or outside of — Spain.

Mas, the presidential candidate of the cross-ideological Junts pel Sí (Together for Yes) coalition, argues that a victory for the pro-independence forces will give him the leverage he needs to demand negotiations with Spain’s central government. Spain’s conservative prime minister Mariano Rajoy, however, has steadfastly refused to discuss autonomy with Mas, let alone an independence referendum. Rajoy contends that any independence process is illegal, and Spain’s constitutional court ruled that last year’s November referendum was illegal. Though Mas backed down and canceled the vote, he nevertheless provoked Madrid by holding a non-binding plebiscite to flex the muscles of the Catalan independence movement. In turn, Rajoy’s refusal to discuss the matter or even permit an in-out referendum has alienated Catalan voters who might not otherwise be enthusiastic about independence.

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RELATED: Can Felipe VI do for federalism
what Juan Carlos did for democracy?

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At face value, Catalans are merely going to the polls on September 27 to elect the 135 members of the regional parliament. But after the Greek eurozone showdown earlier the summer threatened the eurozone’s stability and split Europe’s north and south, and even as the ongoing refugee crisis is threatening the integrity of the borders-free Schengen zone, splitting Europe’s west and east, the cause of Catalan independence could become the European Union’s next fashionable crisis.

Mas promises that if the Catalan electorate gives Junts pel Sí a majority in the Catalan parliament, however narrow, it will be sufficient to launch an 18-month process that will result in the region’s independence and promulgate a new Catalan constitution.

So what exactly is happening in Catalonia? And what should we expect the day after regional elections? Continue reading What’s at stake in this weekend’s Catalan regional elections

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.

Theodorakis

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

Is Donald Trump the American version of Le Pen?

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Over the weekend, Le Figaro pondered whether Donald Trump, the tart-tongued real estate mogul, might be the U.S. version of Jean-Marie Le Pen, the French far-right founder of the Front national (National Front) who’s also become notorious for controversial statements and for trampling ‘political correctness.’USflag

Le Pen, after all, edged out the leftist prime minister Lionel Jospin in the 2002 presidential election, establishing the Fifth Republic’s most lopsided runoff between the noxious Le Pen and the incumbent, center-right Jacques Chirac. Le Pen’s daughter, Marine Le Pen, who is working to broader the FN’s appeal, is polling high in the 2017 presidential contest and may win one of the two final runoff spots.

There are significant differences between the Le Pen family and Trump. Le Pen pere frequently expressed his doubts about the Holocaust with a heavy dose of anti-Semitic populism — so far, Trump hasn’t started questioning the Holocaust or attacking Jewish Americans. But both Le Pen and his daughter developed a significant constituency of French voters by expressing outrage against the influx of immigrants into the country, a concern much closer to Trump’s heart (he announced his candidacy by attacking Mexicans, promising to build a wall along the southern US border and billing it to the Mexican government).

More recently, Marine Le Pen has broadened her attacks to include European institutions, including the eurozone, as an attack on the sovereignty of France. In her exclamations of “Oui, la France!” there’s more than an echo of Trump’s “Let’s make American great again” shtick.

But the support that Trump has amassed in the summer of 2015 isn’t so unlike the wave of populism that’s enveloped Europe (on both the right and the left). Though the US economic recovery has chiefly outpaced that of Europe’s, it’s not been an easy expansion. Sustained unemployment, tepid GDP growth and stagnant wages have left working-class and middle-class American voters less secure — just like working-class and middle-class European voters.

It’s no surprise that since 2010, several new voices of the populist right and the populist left have demonstrated their electoral muscle:

  • In Italy, comic and blogger Beppe Grillo obtained nearly a quarter of the vote in the 2013 elections, and polls show that he still commands upwards of 25% of the vote. Frank Bruni wrote in May in The New York Times that Trump shares much in common with Silvio Berlusconi, the media tycoon who dominated Italian politics from the mid-1990s to the late 2000s and, like Trump, reveled in controversial pronouncements. But Berlusconi was primed for politics by Bettino Craxi, the Socialist prime minister in the 1980s who was ultimately forced into exile in Tunisia; it’s not like George W. Bush or Newt Gingrich developed Trump as a protégé.
  • In the United Kingdom, anti-establishment candidates running for the Scottish National Party (SNP) wiped out longstanding Labour and Liberal Democratic strongholds in Scotland and, in the current Labour Party leadership contest, the far-left Jeremy Corbyn, a firm anti-austerian who wants to renationalize British railways, leads many surveys against more moderate opponents.
  • In Greece, the far-left Alexis Tsipras and SYRIZA (Συνασπισμός Ριζοσπαστικής Αριστεράς, the Coalition of the Radical Left) took power in January’s elections, and the equally far-left Podemos hopes to pull off a similar victory in Spain’s general election in December.

It’s not surprising that economic pain, angst about sovereignty, identity and migration and other doubts about ruling political elites are fueling the same kind of anti-establishment reaction in the United States, too, and it’s the same instinct that powered the ‘tea party’ movement of the early 2010s.

It’s too soon to tell what Trump’s lasting legacy will be on the 2016 presidential race. His poll numbers might soon collapse (or not). He could wipe out before the first votes are cast in the Iowa caucuses or the New Hampshire primary. He might win a few early contests before Republican elites step in (and they will) to deny him the presidential nomination. He’s still holding the door open to an independent third-party run in the general election.

But the real template for Trump isn’t necessarily Le Pen or Tsipras or Corbyn or Grillo or even Berlusconi, though they all draw support from the same anti-establishment, populist reservoir.

Instead, it’s a duo of neophyte businessmen who have taken on powerful (and experienced) political leaders over the past two years to upend the status quo. Though Andrej Kiska and Andrej Babiš aren’t necessarily household names, even in Europe, they represent more closely the kind of appeal that Trump — at his best, perhaps — could replicate to upend the Republican establishment.

If I were Corey Lewandowski, Trump’s campaign manager, I would be furiously studying each case to extrapolate lessons for Trump.

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Kiska (pictured above) is a 52-year old businessman who spent much of his life as a entrepreneur in Slovakia, making his fortune in the installment payments and the credit business. Despite his failures to break into the US market, Kiska shifted to charitable works in 2006, founding Dobrý anjel (Good Angel), a charitable organization that provides funds for the seriously ill.

Running as an independent in the Slovakian presidential election in March 2014, Kiska defeated Slovakia’s sitting center-left prime minister Robert Fico. The Slovak presidency is effectively ceremonial, but Fico’s victory would have consolidated power between the ruling party and the presidency. Fico’s defeat dealt an otherwise popular figure a significant blow — and Kiska’s victory preserved a sense of constitutional balance between the executive and the parliamentary.

Going into the election, Fico was a well-liked prime minister and Slovakia’s economic record outpaced its closest neighbors; Kiska was a political newcomer. Fico’s party, Smer–sociálna demokracia, (Smer-SD, Direction-Social Democracy), still widely leads polls for next year’s general election, for example.

Unlike Trump, Kiska didn’t campaign on the macho, alpha-male persona of a successful businessman. But Kiska succeeded by planting doubts about Fico’s campaign and the fact that Kiska was personally untainted by political corruption and ties to Soviet-era politics. By all counts, he’s thrived in the presidential role since taking office last year. The lesson to Trump is that he can dial down the antics and still present a capable challenge to the GOP establishment. Though Trump may embellish the influence that his past donations might have procured, there’s no doubt he is right when he showcases the corrosive influence of money on politics in the post-Citizens United world.

babis

Babiš (pictured above) is also a Slovak-born businessman, but the 60-year old made his fortune in the Czech Republic. Like Kiska, he left business to form a political party, Akce nespokojených občanů (ANO, Action of Dissatisfied Citizens) in 2011.

In the 2013 Czech elections, ANO won nearly 20% of the vote, finishing a strong second to the Česká strana sociálně demokratická (ČSSD, Czech Social Democratic Party) in a highly fragmented result. Babiš, who developed Agrofert, an agricultural and food processing company, into one of the most successful companies in the country, later purchased a series of media companies before he turned to politics as one of the wealthiest men in the Czech Republic. Not surprisingly, Babiš argued that he would govern the Czech Republic like a business.

More caustic than Kiska, and more sympathetic to neoliberal policies, Babiš attacked both Czech social democrats and conservatives as corrupt and dishonest, arguing for an end to immunity for political figures. In 2012 and 2013, despite his inexperience, he expertly filled a void for an electorate that had lost trust in the central European country’s ruling elite. In that regard, Trump’s rhetoric much more strongly resembles that of the pugilistic Babiš.

In the past four years alone, a center-right prime minister resigned after his chief of staff (with whom he had become romantically involved) was caught spying on the former prime minister’s wife. It’s also a country where a former Social Democratic prime minister won the presidency in early 2013 and immediately tried to outmuscle the Czech parliament in a constitutional power struggle. That gave Babiš the opportunity to present himself as the truth-telling man of action, despite fears that ‘Babišconi’ would become just another oligarchic leader and despite troubling accusations that he cooperated with the Czech internal police during the Soviet era as well as with the Soviet KGB.

Nevertheless, after the 2013 election, Babiš  set aside his differences with elites and brought ANO into the current government — he now serves as the country’s finance minister. Though the next Czech elections do not have to be held until 2017, ANO leads polls and there’s a good chance that Babiš could become the next prime minister.

The lesson here from Trump is that the righteous ‘pox-on-both-your houses’ anger of the outsider can be effective so long as it’s targeted on the tangible excesses and failures of the ruling class. But it’s not enough, as Trump has done, just to call yourself ‘smart’ and politicians ‘stupid.’ What made Babiš successful was presenting the devastating case for why Czech politics had become so broken.

 

How Schäuble’s failures shape the eurozone fight

German Finance Minister Wolfgang Schaeuble attends a German-Greek chamber of industry meeting in Athens, on July 18, 2013. Local authorities stepped up security in the capital for the visit, as Schaeuble is seen by some in Greece as a champion of the tough austerity policies that have gripped the country for the past four years. AFP PHOTO / Angelos TzortzinisPhoto credit to Angelos Tzortzinis /AFP.

Though it’s Yanis Varoufakis, the Marxist economist and recently deposed Greek finance minister, who is typically painted in the media as the drag on the long-running negotiations to avoid a Greek default and keep the country within the eurozone, his intransigence has been met at every step of the way by Germany’s finance minister Wolfgang Schäuble, whose sneering impatience for Greek demands has been no less personal than Varoufakis’s over-the-top denunciations of European ministerial colleagues as ‘terrorists.’Germany Flag Icon

Schäuble’s sharp-tongued wit has been a constant through five years of negotiations that stretch back long before prime minister Alexis Tsipras and the far-left SYRIZA (Συνασπισμός Ριζοσπαστικής Αριστεράς, the Coalition of the Radical Left) took power in January. On Thursday, Schäuble joked to an increasingly concerned US treasury secretary Jack Lew that he would be willing to swap Europe’s Greece troubles for Puerto Rico’s debt crisis.

When it comes to Greece, Schäuble is in many ways Germany’s opposition leader, even though he’s a stalwart of chancellor Angela Merkel’s governing Christlich Demokratische Union Deutschlands (CDU, Christian Democratic Party). He’s made it clear throughout the course of negotiations that he favors pushing Greece out of the eurozone, a result that other European leaders worry could destroy the single currency’s credibility — not to mention plunge Greece into an even more painful depression. Back in 2011 and 2012, few German politicians — just a handful of grey-haired Bavarian conservatives — were willing to call for Greece’s eurozone exit. Today, however, it’s a mainstream position, even on the center-left.

Germany is currently governed through a ‘grand coalition’ between the center-right CDU and the Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party) that includes around 80% of the entire Bundestag, the lower house of the German parliament. Nevertheless, Merkel is limited in her maneuverability — if she gives too much to Greece, there’s a chance Schäuble could lead a revolt of CDU backbenchers who already worry Merkel has transformed the party into a political amoeba that sways to the path of political expediency.

As Tsipras and his new finance minister Euclid Tsakalotos wait for Greece’s creditors to evaluation the government’s probable last proposal for debt relief, there’s a lot that lies in Schäuble’s hands. Even as French president François Hollande has directed his entire economic leadership — prime minister Manuel Valls, finance minister Michel Sapin and economic minister Emmanuel Macron — to help save Greece’s place in the eurozone, German doubts about the deal, a three-year bailout of over €50 billion, could still derail Saturday’s deadline. A full summit of the European Union’s leaders has been scheduled for Sunday. With banks running out of money and Greece banks nearing insolvency, European leaders have made it clear that if they don’t reach a deal with Tsipras on Saturday, they will spend Sunday addressing how Greece will exit the single currency.

Germany, as the largest member-state, is the largest contribution to any stability funding that comes from the European Commission and/or the European Central Bank. It’s currently on the hook for around €90 billion of Greece’s €5320 billion public debt. Merkel, despite doubts in her own party, has supported Greece’s two bailouts in the past, though she’s done so by demanding harsh strings that satisfy her own conservative flank and, of course, German taxpayers, who are ultimately on the hook for nearly one-third of Greece’s bailout debt.

Back in 2010, with a nod to moral hazard, Merkel cruelly told then-prime minister George Papandreou that she had to make the bailout as difficult as possible:

Mr. Papandreou says that when he asked German Chancellor Angela Merkel for gentler conditions in 2010, she replied that the aid program had to hurt. “We want to make sure nobody else will want this,” Ms. Merkel told him.

In principle, it was Merkel’s nod toward moral hazard — she couldn’t give the Greeks terms that Spain, Italy, Ireland, Portugal or the Baltic states might soon want. But in practice, it was a sop to the German right, which was growing ever more disgusted at consecutive Greek governments, which haven’t had the strongest reform record.

But Schäuble makes Merkel look relatively welcoming. The 72-year-old finance minister, according to reports, apparently asked Greek negotiators how much money it would take to get them to leave the eurozone. Continue reading How Schäuble’s failures shape the eurozone fight

Three ways Europe and Greece could blow their last chance at a debt deal

varoufakiseuclidPhoto credit to EPA/BGNES.

The world woke up to the news Monday morning that outspoken Greek finance minister Yanis Varoufakis had, at long lost, been dismissed by his prime minister, Alexis Tsipras.Greece Flag Icon

Varoufakis (pictured above, right, behind Greece’s new finance minister, Euclid Tsakalotos) had become, to say the least, a brake on negotiations with the Eurogroup, even though his widespread popularity and strident anti-austerity boosted Tsipras’s government to a stunning victory in Sunday’s debt negotiations referendum, whereby 61.31% of voters rejected a prior plan offered by Greece’s European creditors.

European officials struggled to reach consensus with Varoufakis, who just last week, in the middle of the rushed referendum campaign, referred to his European ministerial colleagues as ‘terrorists.’ Tsakalotos, an Oxford-trained economist, is expected to take a more mild-mannered approach, and he already supplanted Varoufakis as Greece’s chief negotiator back in April. That was, however, only to the extent anyone could supplant the motorbike-riding, free-wheeling Varoufakis, who gave his final press conference as finance minister Sunday night in a t-shirt.

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RELATED: If Grexit comes,
Greece will have wasted five years in depression

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Varoufakis’s resignation, along with a pledge of national unity across Greece’s mainstream domestic political spectrum, breathed new life into hopes for last-minute talks for a third bailout, allowing the country to reopen its illiquid and perhaps insolvent banks, lift (at least partially) capital controls that have limited daily cash withdrawals to €60, restore liquidity to ATMs that have run out of cash altogether, address Greece’s €1.6 billion default on June 30 to the International Monetary Fund and meet a July 20 deadline to make a €3.5 billion payment to the European Central Bank.

For all the celebration that followed the resounding ‘no’ vote in Sunday’s referendum, the coming Sunday could bring financial austerity far more severe than Greece has known in the past five years, marked by a nearly 30% drop in GDP growth and a 26% unemployment rate. Failure to reach a deal could result in a shortage of cash, food, medicine and so many other necessities to the extent that European leaders are whispering that Greece could require humanitarian aid.

Notwithstanding the dire consequences, a deal is not necessarily likely — or even possible. If they’re lucky, the European Union has five days to prevent Grexit. Here are four reasons why it will be so difficult in the hours ahead.  Continue reading Three ways Europe and Greece could blow their last chance at a debt deal

If Grexit comes, Greece will have wasted five years in depression

oxi

Photo credit to Orestis Panagiotou / EPA.

If you think the past nine days have been tense, just wait.Greece Flag Icon

For all the uncertainty and mistrust that have characterized Greek-EU relations since Greek prime minister Alexis Tsipras suddenly announced a snap referendum last Friday, the week ahead promises to reach ever dizzying heights of suspense after Greek voters delivered a strong endorsement to Tsipras by rejecting the terms of the most recent deal on offer from the Eurogroup — over 61% of the electorate voted no (or ‘oxi’). The result, whether Tsipras admits it or not, essentially begins the process by which Greece will eventually leave the eurozone.

There are no winners here.

Tsipras and the far-left SYRIZA (Συνασπισμός Ριζοσπαστικής Αριστεράς, the Coalition of the Radical Left) took power after January’s parliamentary elections on the mutually incompatible pledge of keeping Greece in the eurozone while demanding more lenient conditions from the country’s creditors. In so doing, Tspiras miscalculated European goodwill. It wasn’t unreasonable for Tsipras and finance minister Yanis Varoufakis to argue that Greece’s debt load is unsustainable. Moreover, even plenty of orthodox economists, including many at the International Monetary Fund, one of Greece’s creditors, admit that years of austerity have exacerbated economic conditions — GDP contraction of nearly 30% since 2008, a 26% unemployment rate and a nearly 50% youth unemployment rate. But the erratic and amateurish approach of the Greek government, capped by Tsipras’s 11th-hour decision to call the July 5th referendum, destroyed what little goodwill remained for his government.

There’s still time — even now — for Greece and the rest of Europe to reach a deal. But the complete lack of trust between Tsipras’s government and the entirety of the rest of the eurozone’s leadership makes it much less likely to happen. The complete breakdown in trust between Tsipras and even sympathetic European leaders must certainly rank among the most troubling casualties of the past nine days. Continue reading If Grexit comes, Greece will have wasted five years in depression

Greek referendum — the right step at a dangerously wrong time

greferendum

For the past 48 hours, the rest of Europe and, indeed, the rest of the world have watched Greece come unhinged. Greece Flag Icon

In a speech shortly after midnight Friday night, prime minister Alexis Tspiras announced that instead of continuing negotiations between the Greek government and the Eurogroup of eurozone finance ministers, he would call off talks to hold a referendum next Sunday, July 5, thereby putting the question to the Greek people — will they accept the terms of the latest deal with Greece’s creditor institutions or will they reject it?

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RELATED: Seven lessons from the Greek election results
RELATEDMeet Greece’s new economic policymakers
RELATED: As Schäuble sneers, Greeks agree four-month debt deal
RELATED:  What are the chances of snap elections (again) in Greece?

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Never mind that the creditors’ offer could be moot by next Sunday.

Never mind that Greece faces, at best, a technical default on Tuesday.

Never mind that the referendum caught everyone else in Europe off guard, eliminating what little goodwill Greece had left.

Never mind that Greece’s constitution seems to forbid direct referenda on fiscal matters.

Never mind that it seems to be accelerating a financial crisis now mandating extraordinary measures in Athens.
Continue reading Greek referendum — the right step at a dangerously wrong time

Four sentences that frame the Greek-EU brinksmanship conundrum

tsiprasbrink

If you don’t have time to read Suffragio‘s latest update on the chances of Greek elections, here’s an easy framework to think about the endgame for Greece and EU leaders:Greece Flag Icon

1. The central dilemma for Greek prime minister Alexis Tsipras and his SYRIZA-led government is that the Greek electorate wants both (a) Tsipras to continue to engage in high-stakes brinkmanship with the European Union and Greece’s lenders to get a better deal on Greek debt and (b) to remain in the eurozone, and this is an untenable position for Greek voters to take, given the facts — even if you believe that the austerity measures taken pursuant to Greece’s two bailouts were unjust and injurious to the Greek economy.

2. The trickiest question now is when Greece and the Eurogroup will reach a ‘brink’ moment where there’s no going back, which could be triggered by any sort of financial, political or other factors.

3. If Tsipras calls fresh snap elections before the ‘brink’ moment, it could make a final deal on Greek debt even harder because Tsipras might easily win a stronger mandate from the Greek electorate, especially if Greek voters don’t fully realize the inconsistencies of point (1) above (and, by the way, Tspiras will have no political incentive to clarify them).

4. If the ‘brink’ moment comes before any fresh elections, Tsipras will have to choose between (a) making a deal with the Eurogroup, which will cause SYRIZA to crumble one way or another (though not necessarily Tsipras if he’s politically talented enough to emerge as the leader of whatever center-left entity emerges from the collateral damage) or (b) returning to the drachma, probably on an involuntary basis when Greece can’t meet its obligations.

Call option 4a the ‘Cyprus 2013’ option.

Call option 4b the ‘British Black Wednesday 1992’ option on steroids.

Both will be painful.

Economist Tyler Cowen, over at Marginal Revolution,  has taken to calling Greece’s new government the ‘Not Very Serious People,’ riffing off a term familiar to Paul Krugman’s readers. But put aside all the smoke over the personalities (of course Wolfgang Schäuble and Yanis Varoufakis hate one another) and the smokescreen over reparations and the possibility of a last-minute loan from Moscow (or Beijing), and what you’re left with is the conclusion that Tsipras and his government have some Very Serious decisions to make soon.

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

putintsipras

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?

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