Tsipras’ Greek balancing act begins

Greek Prime Minister Alexis Tsipras holds a press conference with European Parliament President Martin Schulz at his office on January 29, 2015 in central Athens, Greece. (Photo by MIlos Bicanski/Getty Images)

Continuing our series of Monkey Cage Election Reports, the following is a guest post from political scientists Akis Georgakellos of Strategο and Harris Mylonas of George Washington University.

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The much-awaited Greek parliamentary elections took place on Jan. 25, and the first moves of the new government are making headlines all over the world. Greece is now ruled by 40-year-old Alexis Tsipras— head of the Coalition of the Radical Left (“SYRIZA”) and the youngest prime minister in Greece since 1865.  It is the first time in Greek history that a left wing party has formed the core of a Greek government. Tsipras is the first PM in Greece who has declined to take a religious oath, does not wear a tie, and lives in an apartment in a middle class neighborhood in Kipseli—a destination for many recent immigrants. But this is where trivia ends and politics begin.

Since the first bailout agreement was signed in 2010, three parliamentary elections have taken place (May 2012, June 2012, January 2015); five prime ministers have been in office; and six political parties have participated in the various governments.  Those political parties ranged from the conservative Popular Orthodox Rally (“LAOS”) and Independent Hellenes (“ANEL”) to center-right New Democracy (“ND”) and center-left PanHellenic Socialist Movement (“PASOK”), to the Democratic Left (“DIMAR”) and now, SYRIZA. The only parties in the parliament that have not governed are To Potami (The River)— founded just a year ago, the Communist Party of Greece (“ΚΚΕ”), and the extreme-right Golden Dawn, whose leader is literally behind bars.

During the electoral campaign the political climate was polarized, yet it was characterized by the resounding absence of any concrete proposals and vague statements on the single issue that dominated: Greece’s debt and its relationship with the Troika (IMF, ECB, and European Commission). Parties manipulated symbols and tapped into voters’ emotional world.  SYRIZA prevailed as the main choice within the anti-austerity bloc and gained the votes of people that wanted governmental change and those who believed they had nothing to lose. SYRIZA opted for a safe campaign emphasizing “hope” while skillfully downplaying the term “left.” Importantly, voters who did not believe that SYRIZA would keep its unwavering position during debt negotiations still voted for the party hoping for effective bargaining with the creditors.

ND, the core party in the previous governing coalition, dropped no more than 2 percent points from its June 2012 result despite the fact that it implemented unpopular policies. Nevertheless, it came in second in the elections, 8.5 percent behind SYRIZA. Following the May 2014 European Parliament elections, former PM Antonis Samaras was faced with a choice between intensifying the reform effort or working for “electoral readiness.”  ND erroneously assumed that the moderate, Europe-oriented, and reform-focused electorate was locked in and that the party could risk a right-wing tilt.  In the end, ND lost many of the former and did not gain enough of the latter.  Its campaign strategy invested in fear and lacked focus.

The extreme-right Golden Dawn more or less preserved its June 2012 electoral percentage and came in third, while the River made it into the parliament for the first time—though not into the coalition government. ΚΚΕ appears satisfied with its performance given the polarized climate. But the party that best took advantage of the electoral campaign period was ANEL. Its campaign was the most successful: It used the right message, targeted the correct audience, and presented it in an appropriate way.  Thus, not only did it pass the 3 percent threshold, but also it surpassed the once dominant PASOK and became the junior coalition partner.  PASOK survived former PM Papandreou’s defection, but received the lowest percentage in its 40-year history.  As expected, DIMAR and LAOS, both junior coalition partners in pro-memorandum governments from which they later defected , vanished electorally.  Turnout was rather low for Greece, 63.87 percent—but the official list of eligible voters needs updating.

The new government

On Jan. 27, the new government was sworn in. What is surprising for a left wing government is that only six women are included in the cabinet and none of them is a minister.  A woman was appointed president of the parliament, however. Zoe Konstantopoulou, daughter of a prominent Greek politician, will be the youngest president of the parliament in Greek history. The members of the cabinet are rather inexperienced since only two of its members have served in a cabinet before.

The coalition between the left wing SYRIZA and the right wing ANEL did not come as a surprise. The puzzlement that it did produce in many corners of the world means that these observers have probably not followed the political realignments that have taken place in Greece since the onset of the crisis.  This coalition builds on an anti-austerity platform and the desire to restructure Greece’s national debt.  This coalition is evidence that the “memorandum” vs. “anti-memorandum” policy cleavage—referring to the memoranda signed between the troika and the Greek government, which was dominant in the 2012 elections and persisted in the 2014 European Parliament elections—remains the dominant political dividing line in Greek politics. The real question is if SYRIZA is willing to sacrifice its social and left-leaning agenda on immigration, citizenship law, defense spending, gay rights, and so forth, in order to maintain a united front on debt negotiations. ANEL does not seem to be willing to alter its red lines, judging from Kammenos’s helicopter trip over Imia (the islets that nearly triggered a war with Turkey in 1996). The extent to which the “memorandum” vs. “anti-memorandum” dividing line will continue to trump the left-right axis will ultimately depend on the actions of this new government.

The politics of debt negotiations

The negotiation tactics of the Greek government and its creditors occupy the attention of news agencies.  Before the elections took place, the consistent message from EU officials was, “we will give you some time, we will negotiate—short of debt restructuring not to mention write off—but you need to keep your word and keep making reforms.” Austerity is still the recipe relentlessly propagated by the dominant German coalition. Professor Yanis Varoufakis, the new minister of finance whose style deviates from that of a mainstream politician has made a sensation with his statements—for example, following his recent meeting with  Jeroen Dijsselbloem, president of the Eurogroup and the European Stability Mechanism (ESM) board of governors, he declared that the new Greek government will not cooperate with the troika of lenders but will only talk to official EU institutions and the IMF. Many believe that this meeting set the stage for the next steps while others see it as taking Greece’s position many steps back.

Whether the posturing and the red lines of the Greek negotiating team will succeed in getting a better deal depends mostly on the configuration of European politics. On the one hand, there is a growing sense—outside Germany—that austerity has reached its limits, deflation is knocking on Europe’s door, the ECB decided to pursue quantitative easing against German Chancellor Angela Merkel’s will, growth has stagnated and many Europeans admit that the problem is structural. On the other hand, many analysts rightly point out that European leaders who support austerity politics are unlikely to approve a write-off or restructuring of Greek debt, fearing that such a move will help anti-austerity parties come to power in other countries of Europe, such as Spain or Ireland, and ultimately also ask for more.  French President François Hollande appears to be ready to operate as an arbitrator between the two sides. President Obama recently entered the debate, suggesting that Greece needs growth, not more austerity. Even Greece’s allies who are against austerity recognize the need for reforms to ensure competitiveness and growth. SYRIZA’s economic program, however, includes things, such as raising the minimum wage and holding off privatizations, that may hinder growth. In the end, the two sides may compromise on an extension of the repayments that will be linked to a growth quota. The key question is whether Tsipras and his team will manage to create a coalition of European leaders—not just of Euroskeptic and opposition parties—to fight the austerity consensus.

In the meantime, Tsipras will have to engage in a balancing act of herculean proportions to successfully renegotiate Greece’s bailout involving the European leaders and institutions, SYRIZA’s parliamentary group, and the junior coalition partner.  At the same time, he will also need to manage the tensions between the high expectations that SYRIZA’s electoral campaign promises have produced and the reality of Greece’s tight budget. As time is of the essence with the impending sizeable debt repayments and the underlying problems of the Greek economy — low competitiveness and tax evasion — muddling through is not an option. If Tsipras pulls this off then he may dominate politically in Greece. If he fails, a Greek exit from the euro zone with all of its consequences becomes a real possibility.

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Note: This post was updated to reflect that Jeroen Dijsselbloem is also president of the Eurogroup in addition to the ESM board of governors.