Tsipras, a Political Master

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Europe and the world should be taking a moment and reflect on the political mastery of Alexis Tsipras of Greece. In less than a year, Mr. Tsipras won two general elections, won a referendum and implemented contradictory policies, all this by changing his political standing and under terrible domestic and economic conditions. Aside from political ideology, Alexis Tsipras is undeniably one of the most talented European politicians. However has his mastery of politics translated into sound governing skills?

Early 2015, most Europeans, including a some Greek citizens, had never heard of Alexis Tsipras. The 41 year old tieless politician finds his political ideology in extreme left affiliated at first to the Communist Party. His political house is centered in the extreme left side of the political spectrum. After years of internal evolution in the Greek lefts, he then became the leader of the exteme-left wing party, Syriza (which means Coalition of the Radical Left) and was elected at the helm of Greece in February 2015. This was the beginning of his true political exposition.

Chapter 1: His election in February 2015 marked the end of the decade long transfer of power between the two leading parties. Tsipras was elected based on a program of anti-austerity policies, fight for Greek interests before the Troika (ECB, IMF, and Commission), increase of minimum wages, restauration of state employees and increase of pensions. If European media were deeply skeptical about his rise and thought that he would not last a year, they have appeared to be wrong. Ensuing his election, Tspiras disappeared from European minds until the looming of the deadlines for debt repayments of the IMF and ECB.

Chapter 2: The second chapter of his reign started several weeks prior the eventual default 478861728of Greece for the repayment of a  €1.5 billion to the IMF on June 30th, and a second one to the ECB mid-2015. These negotiations at EU finance ministers level and EU leaders level were extremely tense as neither Tsipras nor his finance minister, Yanis Varoufakis, wanted to accept the deal put on the table by the Troika and Germany. At the last minute, PM Tsipras called for a referendum on July 5th asking Greeks to decide on their fate: voting yes to the deal implied more austerity measures; a no vote was a rejection of the deal and could lead to a Greek default and leaving the Eurozone, known as a Grexit. Not only did Tsipras organized the referendum without noticing his European partners, but he campaigned for the no vote.

Chapter 3: The no camp, or Oxi, won the referendum with 61.3% and Europe was expecting a progressive departure of Greece from the Eurozone. Even President Juncker of the European Commission asked for a report on how to accompany Greece outside the Euro area. Instead of using his domestic mandate, Tsipras fired his finance minister (officially he resigned desipte winning) and went back to the negotiation table

ATHENS, GREECE - 2015/06/29: The word 'OXI' (NO) written on a banner in front of the Greek parliament. Greeks demonstrate in Syntagma square in support to a 'NO' vote in the referendum that will take place on the 5th of July, whether to accept the new agreement between Greece and it creditors. (Photo by George Panagakis/Pacific Press/LightRocket via Getty Images)
ATHENS, GREECE – 2015/06/29: The word ‘OXI’ (NO) written on a banner in front of the Greek parliament. Greeks demonstrate in Syntagma square in support to a ‘NO’ vote in the referendum that will take place on the 5th of July, whether to accept the new agreement between Greece and it creditors. (Photo by George Panagakis/Pacific Press/LightRocket via Getty Images)

requesting the initial deal. Germany refused and France played an important role of holding together the parties and the negotiations alive. Ultimately, Greece agreed on a worst deal than previously offered and Tsipras implemented additional austerity measures and required reforms. The deal entailed the following aspects: raising the age for retirement; a VAT hike at 23% across sectors; privatization of key sectors of Greek economy; and removal of tax breaks for some Greek islands. These reforms would permit to unlock a third loan package of €86 billion until 2018.

Chapter 4: Tsipras agreed on the second deal, agreed at EU level on July 13th, which was worst than the initial offer, and brought it back home for a vote. The Greek Parliament voted and agreed on July 15th, on the bailout deal, which was approved with a 229-64 majority. However, Tsipras’ party, Syriza, seems to have lost some unity with 32 Syriza MPs defying their leader’s pleas and rejected the deal. Throughout July and August, Tsipras was facing serious political criticism and opposition by the members of his own party. Syriza was divided between a radical branch, led by Mr. Lafazanis, and a more centrist one counting Tsipras. The radical branch of Syriza had not accepted the political move by Tsipras to go against the popular vote of the referendum. “Mr Lafazanis’s supporters speak of an ‘ideological betrayal’ and ‘treachery’ by Mr Tsipras’s faction.”

Chapter 5: On August 20th, PM Tsipras announced his resignation and his candidacy for the next general election that would take place mid-September. His rationale was to get reelected without the radical branch of Syriza. His political gamble worked as he was reelected with 35.5% of the vote and was able to drop the hard-liners from his party. Syriza won 145 seats out of the 300 seats of the parliament, only four fewer than after the January elections. In order to assure a majority, Tsipras agreed on a coalition with right-wing party Independent Greeks (ANEL) with its leader Panos Kammenos. ANEL is an ultra-nationalist anti-immigrant party, often compared to UKIP in the United Kingdom. With this alliance, the Syriza-ANEL coalition offer the majority with 155 seats in the Parliament to Tsipras. Even President of the European Parliament, Martin Schulz, expressed his concerns directly to PM Tsipras about this political alliance.

Political Talent over Governing Skills?

In less than a year, PM Tsipras has demonstrated his political talent in remaining alive and electable despite party, domestic and European pressures all this under dire economic conditions and an unemployment level around 25%. If Tsipras proved to the world that he cannot lose an election, he needs to now tackle the true problems of Greece: crony capitalism, clientelism, systemic corruption, and implementing structural reforms of the economy and state. The country has been on life line for over 5 years, its intellectuals are fleeing away, higher education is barely financed and Greece cannot even protect its borders. Winning elections is one thing, implementing reforms and governing are another.

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission).
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Will Tsipras 2.0 be better than Tsipras 1.0?

Photo: AFP
Photo: AFP

Alexis Tsipras resigns after seven months in power, but is seeking for reelection in elections in late September. His time at the helm of Greece was marked by a impossible conundrum: defend Greek interests against powerful European and international forces, ending the austerity while finding growth, and dealing with an ideological split within his party.

Prime Minister Tsipras is calling for a new round of elections, most likely scheduled for September 20th, and he will lead the Syriza party. “I believe we haven’t yet seen our best days” announced the Prime Minister on television “and I’m going to ask for the people’s vote to govern this country – with more experience, with my feet more firmly on the ground.” With a disastrous economic and fiscal situation, Greece is now facing even deeper political uncertainties. With his resignation the country will be governed by an interim-government until the next snap elections in September 20th. Tsipras is leaving office for a better comeback and freeing himself from the rebels of his party. He is looking to “return to power with a more manageable coalition.”

Reflection on Tsipras’ First Tenure

Several points need to be reflected upon his time in office. First, PM Tsipras came into power based on an anti-establishment campaign. His extreme-left party, Syriza, took the power based on many promises: defending Greek interests by ending the international and european austerity measures; and an anti-establishment campaign.

Second, his time in office was quite smooth until the looming of the deadlines for repayment of the IMF and ECB loans. Even though he remains one of the most popular politicians in Greece, the summer has created serious political tensions within his party Syriza. The fight between Greece and the Troika (ECB, Commission, and IMF) over an agreement after missing the initial deadline forced the Tsipras’ government to close Greek banks for almost three weeks. Tsipras was obliged to agree to the terms requiring tax hikes and further spending cuts under the threat of complete collapse of the Greek banking system (read here a past analysis). The deal with European creditors infuriated members his party Syriza, but Tsipras managed to get it approve through the Parliament with the help of the opposition.

Third, the resignation of Alexis Tsipras, which should be seen as a two-step process – first the referendum, and second the agreement to the terms of the bailout – marks in some ways a complex existence and survival of socialism in Europe. To many, Alexis Tsipras was the last embodiment of socialism in Europe. Now the question is: was the international market seeking to make a point in going after Tsipras? With Tsipras’ departures, it seems that austerity measures have become the European landmark in solving deep structural economic crisis. But if reelected, Tsipras would be a much more centrist politician than seven month ago. Tsipras had to move towards the middle creating a split with the radical core of his party.

Referendum, Bailout and Political Tension

When did it go all wrong for Tsipras? And, did it go wrong for Tsipras? For many Europeans, PM Tsipras lost the battle after calling for a referendum and advocating for the no vote (remember the oxi?). In retrospective, the results of the referendum actually did not matter, aside for many Greeks feeling that Tsipras tried to defend them. The referendum was perceived by European partners, especially the Germans, as an act of treason. Greece was already on the thin line with his Eurozone partners since the collapse of its economy and the first bailout five years ago. Greece had mis-behaved and lied to its partners (read here a previous interview on the topic). The referendum was another act of treason for European partners. Once Greeks had voted in favor of the no

ATHENS, GREECE - 2014/10/13: MP with the SYRIZA political party, Mr Panagiotis Lafazanis, talks with a megaphone to the demonstrators expressing SYRIZA support. Kurdish people that live in Athens organised a demonstration in support of the Kurdish fighters that defend the Kobani town in Iraq from ISIS insurgents. (Photo by George Panagakis/Pacific Press/LightRocket via Getty Images)
Photo: George Panagakis/Pacific Press/LightRocket via Getty Images

vote, and a week later PM Tsipras agreed to the new terms of a third bailout, his time was counted. His vocal lieutenant, finance minister Yanis Varoufakis, announced his resignation days after the victory of the no vote. Once Varoufakis was gone, and Tsipras agreed with the terms (criticized by the IMF) and started his transition towards the center. But in some ways, Tsipras’ fate was sealed, or not? In addition, it created a real ideological split within Syriza. Tsipras is undeniable moving towards the center, while the old guard of Syriza, led by the former Energy and Environment Minister, Mr. Lafazanis, have not changed their position. On the referendum, The Financial Times reported that “Mr Lafazanis’s supporters speak of an ‘ideological betrayal’ and ‘treachery’ by Mr Tsipras’s faction.” The paradox between calling for the referendum opposing the bailout and then accepting the terms of the bailout created an unsustainable political condition for Tsipras.

Some experts and media are comparing Greece to a European protectorate (at least in the leftist literature) after the agreement on the third bailout’s terms. But aside from asking for the approval of his policies, does Greece need another election in such dire times? Tsipras is gambling on a new election in order to get rid of rebels, or what The Economist calls the ‘wild ones,’ build on its domestic legitimacy, and try to govern and reform Greece with a fresh flow of money. Let see if Tsipras can win another election, and how different will Tsipras 2.0 be from the Tsipras 1.0? Can Tsipras 2.0 bring Greece to reform and become a growing and sustainable country under the current conditions? This remains to be seen.

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission).

Syriza – The Greek Silver Bullet?

Photographer: Yorgos Karahalis /Bloomberg
Photographer: Yorgos Karahalis /Bloomberg

Syriza won the 2015 Greek elections with over 12.5 percentage points on New Democracy. Syriza elections at the head of the Greek government should not be seen as a surprise. It was in fact a continuity of its rise. For instance, in May 2014, the party had already won the majority in Greece, with 26.6%, for the European elections. Ensuing the results, Syriza did not have enough votes in order to fully control the new Greek government. The question was answered when Panos Kammenos, the leader of the coalition partner, Independent Greeks, a right-wing party, decided to join forces with Alexis Tsipras. The Independent Greeks, whom received 13 seats at the Parliament, formed a coalition with Syriza, holding 149 seats (two shy of the majority). Independent Greeks and Syriza share one element in common: desire to renegotiate the terms of the bailouts and ending the austerity measures (See below the distribution of power inside the new Greek Parliament).

Source: BBC News
Source: BBC News

In any case, Alexis Tsipras, will become the next greek prime minister. His mandate is based on ending the austerity measures, while maintaining the flow of European assistance to Greece. M. Tsipras, as Chancellor Merkel, President Hollande, know very well that a Grexit – exit of the Greece from the Eurozone – would be a terrible moment for the Euro and the EU. But one of the core questions is: how much are European partners – Germany, France and the European and international institutions – prepared to compromise with him?

Seeking for Dignity and Political Sovereignty

The current legislative elections in Greece have become more than just an election. By bringing Syriza to power Greek citizens want to change the political direction of their country. For now six years, the greek economy is in recession and the succeeding governments – socialists and conservatives – have all continued the same policy based on austerity measures in order to clean-up Greek finances. However, these measures, attached to the succeeding bailouts, have had terrible consequences on the quality of life in Greece.

For the first time in recent years in Europe, it is not a extreme-right wing party threatening to overtake power, but an extreme-left. These elections raise important question: the future of Greece in the Eurozone; the future of austerity measures implemented by the Troika (Commission, European Central Bank, and International Monetary Fund); and the return of democracy in Greece. After voting, Alexis Tsipras made two pledges: first, “Democracy will return to Greece.” Second, “the choice is clearer than ever. Either the troika comes back and continues its work and its catastrophic politic of austerity, or we are moving towards a difficult and tense renegotiations with our partners in order to re-conquer our dignity.” Tsipras was able to base its campaign on the themes of dignity and national sovereignty. In a report on France Inter, a French journalist was describing the emotions of Greek citizens as they feel proud of having reconquered their political sovereignty, which is not anymore under the helm of the Troika -at least for now-.

However, Wolfango Piccoli, managing director at Teneo Intelligence in London, told Bloomberg Businessweek that “Tsipras will be the celebrated winner, but delivering on voters’ larger-than-life expectations has not become easier after the landslide victory.” The next day will be tough for Greeks and Tsipras. Many questions are now being asked in Greece: who will compose the new government? how will Tsipras be able to renegotiate the terms of the bailout? how will Syriza be able to govern?

The Real Impacts of the Austerity Measures

The case of Greece within the Eurozone diverge from other Eurozone members like Italy, Spain, Portugal or even Ireland. When Greece was on the verge of defaulting in 2008, the main reason was that the political class had cooked the numbers for quite some time. Greece had been for decades under a corrupted political class. Syriza rise to power put an end to the perpetual control of Greek politics by either the Papandreou or the Karamanlis family and their connection to powerful oligarchs. If one recall, it took a long time for the other Eurozone members to decide on saving Greece and then how to implement a plan in order to save Greece and keep it inside the Eurozone. In some way, the members wanted to give a lesson to Greece. It has been now more than five years since the first bailout package was delivered to Greece. The first package included “€110 billion ($150 billion) and was first agreed upon by the euro-zone member states and the IMF in 2010.”

In counterpart to receiving bailout money from the Troika, Greece has had to implement serious structural reform in order to reform the labor market and in liberalizing areas of the product markets. Aside from the reforms, the Greek government had to cut pensions, lay out large amount of public servants, and so forth. Certainly Greece lied and did not follow the guidelines established in the Eurozone once it adopted the Euro in 2001. But the costs of the austerity measures on Greece and the greek society have been terrible. How do the austerity measures translate into daily life? For most of Western citizens, these are two words reflecting government spending cuts in most social policies. Well, for Greece and Greek citizens, austerity measures look like this:

  • on public health
    • left over a million without healthcare (for a country counting 11 million citizens, so 1/10);
    • country’s health budget was slashed by almost 40%;
    • rising infant mortality rates by 43% from 2008 to 2010;
    • soaring levels of HIV infection among drug users;
    • the return of malaria;
    • and a spike in the suicide count;
    • decline of birth rate by 15% (a drop from 118,302 in 2008 to 100,980 in 2012);
  • on the economic life
    • decline of GDP per capita from roughly $30,000 in 2008 to $21,000 in 2014;
    • 1/5 of the country lives under poverty lines;
    • rising unemployment levels at 25.8% in Greece compared to 23.7% in Spain, 13.4% in Italy, 13.1% in Portugal and 10.4% in France;
    • highest youth unemployment rate in Europe with 61.5% in 2013 (see chart below);

chartoftheday_1524_Youth_Unemployment_Still_Unrelenting_in_Europe_b

  • on social life
    • cuts on public education and especially higher education;
    • over 200,000 Greek citizens have left the country since 2009, and a majority of them are going to either Germany or the United Kingdom;
    • a ‘brain drain’ is occurring, which will affect the transition of the country in the decades to come.

In some part of the country, Médecins du monde, an international non-governmental organization, is now providing healthcare. On its website Médecins du monde writes that “the measures destined to save the financial system do not take into consideration the human consequences.” In some ways, considering the numbers above, it is not difficult to understand why Greek citizens picked the Syriza route over the traditional center right/left.

Syriza: A European Experiment?

Will the elections of a radical left party save Greece? Not really. Syriza is far from being a silver bullet. However, it could offer some serious leverage in order to loosen the weight of the austerity measures, re-negotiate the terms of the bailout, and find a long-term plan for Greece. Additionally, Syriza has become for many a political experiment in a Europe in search of a new political and economic life. Syriza does not appear to be a red revolution, but rather a road for more human transition.

Dying in Greece because of poverty is a reality, and is unacceptable on one of the richest continents. Greece is a core EU Member State, it is a Member of the Eurozone. The European Union is a political and social endeavor between a group of states committed to such goal. The force of the austerity measures and the requirements on Greece in order to save the Union back in 2008 may have been a necessity at first considering the degree of interconnection between all world banks. However, the continuity of their effects on Greece should have long been renegotiated. The EU has become a multi-speed Union, composed of a Northern Group and Southern Group (rich and poor) on many important issues: in defense with the CSDP; in democratic and judiciary terms – see at Romania, Bulgaria and Czech Republic -; in economic policies – look at Greece, Portugal, Spain and Italy -.

The ECB announced last week the beginning of a massive Quantitative Easing (QE), a program open-ended by nature – at least until the inflation rate of 2% is attained – of a value of €60 billion a month. However, the European QE won’t be enough until the European economic engines are not reformed and become more competitive. In parallel, the European Commission has announced the launch in 2015 of its Juncker Plan, a €315bn investment fund program intended to kick-start the European economy/ies. Both plans, QE and the Juncker Plan, will be necessary, but Member States ought to address their economic, industrial and financial models at home and harmonize them with European regulations and commitments that they agreed to.

Syriza won’t solve Greece’s problems, but it will once and for all bring important issues on the European table. The 2008 financial crisis has had devastating effects on most European citizens. The European welfare states are under-attack; unemployment levels among European youth is too high for any viable future of the EU-28 and the Union; and the rise of political extremes – right and left – endangered democratic foundations. Syriza’s message embodies all these elements. Money won’t solve it all, but politics will. As underscored by Christian Odendahl and Simon Tilford of the Center for European Reform, the three areas of negotiations will be required in Greece: debt relief, austerity, and structural reform. Both side, Greece, and the international institutions and EU Member States, will be bargaining for their side during tense period of negotiations. Both have some nuclear options, as highlighted by Odendahl and Tilford, “the withdrawal of liquidity for Greek banks, which the ECB has said it is considering; and the unilateral default on official loans by Greece.” The bottom is line is keeping Greece in, while loosening government maneuvers.

These elections are for the first time since the 2008 financial crisis illustrating a real popular call for ending austerity measures through neo-keynesian policies (read here a good analysis on the issue), and not anti-globalization and mercantilist policies advocated by extreme-right parties. As Tsipras told Greek citizens a week ago, “Our victory is also a victory of all the people of Europe struggling against austerity, which is destroying our common European future.” Europe will be watching carefully the way Tsipras implements its reforms, while keeping Greece in the Eurozone, keeping the flow of foreign aids, getting private investments, and rebuilding the public sectors to acceptable standards. “Populist parties across Europe” writes Judy Dempsey “are cock-a-hoop over Tsipras’s victory, seeing it as an inspiration for their own political ambitions.” But a failure by Tsipras will be the nail in the coffin for radical lefts and socialist parties around Europe; while a mild- or full- success could change the economic, social, fiscal and monetary debates in the decades to come. Greece is hoping; Europe is monitoring; the World is watching.

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission).