SYRIZA’s historic win gives Europe’s leaders a headache

This was more than just an ordinary national election – it was one that signalled a new chapter in the eurozone crisis and a challenge, by the people of Greece, to austerity.

The victory by the radical left-wing party, SYRIZA, and its leader, Alexis Tsipras (pictured), was expected. However, the scale of the win was larger than predicted in pre-election opinion polls, bringing the party to the brink of an outright parliamentary majority.

SYRIZA won 36.34 per cent of the vote and 149 seats in the 300-seat Greek Parliament. New Democracy (ND), the centre-right party that had led the previous coalition government, won 27.81 per cent and 76 seats.

The far-right ultranationalist Golden Dawn party came third, with 6.28 per cent and 17 seats, the same number of positions held by The River (To Potami), a centre-left grouping formed in 2014. The Communists (KKE) won 15 seats while the conservative Independent Greeks (ANEL) took 13 seats, the same as the Socialists (PASOK), who bore the brunt of the rejection of the outgoing coalition government.

The Movement of Democratic Socialists (Kinima), formed earlier in January by ex-PASOK prime minister George Papandreou, won only 2.46 per cent of the vote, falling below the threshold to to enter Parliament. More than a third of Greeks (36.1%) did not vote.

Within hours of his victory, Tsipras made an agreement with ANEL leader Panos Kammenos to form a coalition. This ‘odd couple’ of far left and conservative nationalist right highlights the key issue in the election: the ‘memorandum’ setting down the conditions of financial support to Greece, which has seen the country implement austerity measures in return for bailouts from the European Union, European Central Bank (ECB) and the International Monetary Fund (IMF).

The new SYRIZA-ANEL coalition government, united in its desire to change the conditions of the bailout, is 11 seats clear of the 151-seat mark to form a majority.

Tsipras was sworn in (tieless, and without taking a religious oath) as Prime Minister on Monday, becoming the sixth PM to take office in Karolos Papoulias’s ten years as President. At 40, Tsipras becomes Greece’s youngest prime minister in more than 150 years. His will also be the first government in more than four decades that is not led by either New Democracy or PASOK.

Greek parliamentary elections 2015 – results

Vote share
Seats

SYRIZA’s meteroic rise: causes and possible effects

A victory for Alexis Tsipras was widely predicted, but it was nonetheless stunning for an ‘upstart’ party such as SYRIZA, which has never been tested in power.

SYRIZA, whose name means ‘Coalition of the Radical Left’, was formed in 2004. It has been gaining in popularity since the start of the Greek financial crisis and the imposition of a tough austerity programme agreed with Greece’s international creditors.

The party’s policy is based on ending austerity and re-negotiating the existing bailout agreements and the Greek debt, which it believes is unsustainable. SYRIZA has promised tax cuts, protection of vulnerable social groups, and measures to end what it calls a ‘humanitarian crisis’ in the country. Tsipras’ party has also pledged to restore the minimum wage to pre-memorandum levels, halt privatisation plans and annul several laws regarding the restructuring of the Greek public sector and its administration.

Although some creditors had feared a possible exit of the country from the eurozone, SYRIZA has stated that it wants Greece to remain in the single currency.

Ahead of the election, Tsipras, a civil engineer who became his party’s leader in 2008, said that “a SYRIZA government will respect Greece’s obligation, as a eurozone member, to maintain a balanced budget, and will commit to quantitative targets”, but declared that he will request an ‘international debt conference’, during which Greece will seek to renegotiate the country’s debt relief.

In his victory speech outside Athens University, Tsipras – who had been vocally backed by far-left leaders from across Europe – said that this was “a victory for all the peoples of Europe fighting austerity”. He added that “The mandate of the Greek people today cancels, in an indisputable way, the memorandums. It makes the troika a thing of the past. […] Greece has turned a page. Greece is leaving behind the destructive austerity, fear and authoritarianism. It is leaving behind five years of humiliation and pain.”

The victory highlighted how five years of fiscal orthodoxy in Europe have turned Greek politics upside down. Greece has suffered greatly from a government debt crisis since 2009, the causes of which include the structural weaknesses of the Greek economy, and a decade-long pre-existence of overly-high structural deficits and debt-to-GDP levels on public accounts.

Greece’s eurozone partners, along with the IMF, agreed to approve a €110bn rescue package in 2010 and a bailout of €109bn through the European Financial Stability Facility in 2011. Greeks have been deeply affected by five years of austerity policies imposed as part of the memorandum. Unemployment stands at more than 25%; more than half of 25- to 35-year olds are out of work. There have been cuts in state benefits and pensions, and higher taxation – including recent charges on real estate.

SYRIZA rode to power on a wave of public dissatisfaction with the main parties who implemented these measures.

A changing political landscape: collapse of the traditional parties

SYRIZA’s victory surpassed the predictions of pollsters and marginalised the two mainstream parties that have run the country since the fall of the military junta and the restoration of democracy in 1974.

Combined, the centre-right New Democracy (ND) party and the centre-left PASOK party won less than a third of Greek votes. Now, seven political parties will have representatives in a revamped Parliament: two thirds of MPs in the outgoing assembly failed to win re-election.

The defeat for ND was heavy: it was nearly nine percentage points behind SYRIZA. However, it dropped less than two points from its score in the previous parliamentary elections in June 2012.

The ND leader and outgoing PM Antonis Samaras conceded defeat, saying that he respected the decision of the Greek voters and acknowledged some mistakes.

Samaras added that he left office with a clear conscience, handing back a country that is without deficits, is still a member of the eurozone and the EU, and which has renewed international credibility. “I hope the next government keeps it that way”, he added.

Although Samaras’s leadership of ND has not been formally challenged, none of the party’s prominent members has affirmed his support. Samaras is said to be planning to ‘sit tight’ and see how the SYRIZA-led government performs, in the expectation that the coalition will collapse and there will be another round of elections.

While ND’s support has slid, PASOK’s has fallen off a cliff (see chart below). In 2009, the Socialists won 43.9 per cent of the vote. In 2015, they won barely one tenth of that score (4.68 per cent). PASOK lost much of its popular support as a result of the unprecedented austerity measures that accompanied the international bailout requested by the Papandreou government in 2009; in 2012, when it won 12.3 per cent of the vote, it entered into a coalition with ND that oversaw further austerity measures, and which led to a further erosion in its support.

PASOK’s leader, Evangelos Venizelos, called a party congress after Sunday’s election, indicating that there would be a leadership contest. He claimed that the party’s poor showing did not reflect the efforts it had made and its honesty before the electorate.

Venizelos also accused Papandreou of “gifting third place to Golden Dawn”, by setting up a rival party, Kinima, only three weeks before the election, undermining the party founded by Papandreou’s father.

Kinima failed to get into Parliament, but Papandreou said his political movement would remain active, noting that it was an achievement in itself that a party less than a month old fared as well as it did. He also underlined the need for “broader consensuses and alliances” and called for a referendum on the way forward for managing the country’s debt.

Golden Dawn came in third, despite losing seats and share of the vote, and despite having more than half of its MPs (including its leader) in jail. To Potami (The River), a centrist political party founded in 2014 and whose MEPs sit in the Socialists & Democrats Group in the European Parliament, won 17 seats. Party leader Stavros Theodorakis, who was open to power-sharing talks with SYRIZA, said he would not support any coalition that includes anti-European forces.

Who are the Independent Greeks, and why was a deal made so quickly?

Alexis Tsipras surprised many observers by agreeing a coalition with a conservative nationalist party, Independent Greeks (ANEL). The party’s leader Panos Kammenos broke away from ND in 2012 in a row over the country’s international rescue programme, and promptly founded his own party.

At first glance, a coalition between radical left-wing SYRIZA and the right-wing Independent Greeks seems odd. One expert on Greek politics, Roman Gerodimos, noted this week that ANEL “has a track record of xenophobic, homophobic and anti-immigrant policies” (Kammenos has been accused of anti-Semitism after he alleged in December that Jews enjoyed preferential tax treatment in Greece).

SYRIZA, meanwhile, has “traditionally supported… civil partnerships for same-sex couples and giving second-generation migrants Greek citizenship”. ANEL is is a keen supporter of the Greek Orthodox Church, while SYRIZA is a secularist party.

Nevertheless, the two parties are united in their vehement opposition to austerity and determination to renegotiate the country’s international bailout. Kammenos even blames shadowy international plots for Greece’s economic troubles, and has said that Germany treats its European partners as “concubines”.

Aristos Doxiadis, an economist and venture capital professional who researches and writes on the Greek economy, and especially on the institutional aspects of the crisis, has said that “two ambitious and pragmatic populists [Tsipras and Kammenos], without any ideological inhibition and with great management skills of both people and symbols, agreed to build a power block to rule horizontally beyond the left-right axis”.

Doxiadis added that “Tsipras did not team-up with Kammenos because of temporary need” but “Kammenos is valuable as a permanent wedge into the right, where he might be able to expand its influence, if New Democracy does not quickly recover. Welcome to House of Cards, Greek version”.

However, ANEL could prove to be an unpredictable partner, while governing with a right-wing party could disrupt the delicate balance among the various left-wing factions that make up SYRIZA.

International reaction to the results

“I look forward to working with you for the benefit of the citizens of Greece and the European Union”, wrote European Commission President Jean-Claude Juncker to Alexis Tsipras via Twitter, although he added later in the week that there was no chance of Greece’s debt being cancelled.

European Parliament President Martin Schulz was one of the first to congratulate Tsipras and met him on Thursday (29 January) in Athens, with Schulz saying afterwards that he expected Tsipras and the European institutions to find “common ground”. Tsipras and his Finance Minister, Yanis Varoufakis will also meet the Dutch Finance Minister and President of the Eurogroup, Jeroen Dijsselbloem, on Friday.

The French President, François Hollande, highlighted Franco-Greek friendship, and his desire to pursue cooperation between the two countries and serve growth and stability in the eurozone. A spokesperson for German Chancellor Angela Merkel said that Germany respects the decision of the Greek electorate, noting that “the new Athens government will have to take steps to foster Greece’s economic recovery. This also means Greece sticking to its previous commitments.”

European finance ministers and the European Commission have signalled their willingness to cooperate closely with the new Greek PM, noting the positive elements of SYRIZA’s programme, including the party’s commitment to keep Greece in the eurozone, and its determination to fight corruption and tax fraud. At the same time, they stressed that the elections did not change the terms of the programme and that the Greek economy faces challenges that call for reforms.

SYRIZA’s victory made the front pages of most major international newspapers.

‘Syriza’s historic win puts Greece on collision course with Europe’, wrote Britain’s Guardian, adding that “At a stroke, the Greek general election of 2015 has destroyed the post-recessionary political norms and assumptions of Greece and shaken those of the European Union to the core as well.”

The Financial Times wondered whether Alexis Tsipras will rule in the model of Venezuela’s Hugo Chavez or Brazil’s Lula Da Silva, the latter having ruled as a reformist rather than a radical leftist. They also note that the fact that his party’s “far-left factions abhor pragmatism” is working against him, estimating that Tsipras is unlikely to enjoy a long spell in government.

German tabloid newspaper Bild said ‘Greeks elect the Euro-horror’, while Die Zeit was more sympathetic, saying Tsipras should be given a chance. Der Spiegel said that “Perhaps Tsipras will have the courage to tackle the Greek shipping and media magnates and get the tax revenue he needs for this welfare programmes”. Frankfurter Allgemeine Zeitung warned that “Tsipras won’t able to get past one fact: Greece continues to need foreign money, be it from the financial markets or the EU. He has to choose between compromise with the troika and a major state bankruptcy.”

‘Will Europe allow to be blackmailed by Tsipras?’, asked Die Welt, suggesting that “even the Greek voters do not believe that Tsipras will seek a showdown with international creditors”. Sueddeutsche Zeitung added that “Mr Tsipras may now have to follow his brilliant victory with what the Greeks call a ‘kolotumba’ – a somersault”.

On its cover, France’s left-leaning Libération presents Tsipras as ‘Europe’s new face’, adding that SYRIZA’s victory “opens up new prospects for the country and gives hope that European austerity policies will be eased”. Centre-right paper Le Figaro was more sceptical, saying that Greece’s radical left now faces a reality check.

Italian centrist newspaper La Stampa urged the EU and IMF to compromise over the terms of Greece’s bail-out, warning that what it calls “Germany’s fiscal dogmatism” could do more harm to Europe than Greece’s debts.

In 2012, the Eurogroup agreed to take new decisions if Greece returned a primary budgetary surplus (not including the servicing of the debt), if it respected its commitments, and if such a reduction proved necessary.

Alexis Tsipras has repeatedly stated his intention to request a debt write-down of up to 50 per cent, claiming that the Greek debt is not viable. However, Greece’s lenders have shown no intent to give in to SYRIZA’s demand.

Klaus Regling, the Director General of the European Financial Stability Fund (EFSF), reaffirmed that “there is no debt overhang in Greece, at least not in the next two years if the reforms continue, because the solidarity provided is so huge that the debt ratio at which many people look is not enough to judge the real underlying situation”.

Benoit Coeure, a member of the Board of the European Central Bank, pointed out that “It is not up to the ECB to decide whether Greece needs debt relief”, clarifying that “we cannot agree to a debt relief that includes Greek bonds that are located at the ECB”.

At the same time, Christine Lagarde, the Managing Director of the International Monetary Fund, told Le Monde that “There are internal eurozone rules to be respected”, underlining that “We cannot make special categories for such-or-such country.”

The general index of the Athens Stock Exchange was down 9.2 per cent after the elections and on Wednesday the Greek banking index fell by 27 per cent, hitting a record low, after the new cabinet’s first meeting. Greece’s banks have lost almost 40 per cent of their value in the three days since SYRIZA’s electoral victory amid fears of a bank run and the loss of ECB support. Standard & Poor’s, a credit rating agency, put Greece on a ‘watch list’ for a further downgrade.

Forming the government

The new cabinet was announced and sworn in on Tuesday (27 January).

Its members represent a very wide range of ideologies and traditions, which the Guardian called “a formidable coterie of academics, human rights advocates, mavericks and visionaries”.

Economist Yannis Dragasakis, one of the founding members of SYRIZA, who has his origins in the Communist Party (KKE), was named Deputy Prime Minister. One of the few cabinet members with previous experience in government, he will be responsible for overseeing negotiations with the ‘troika’ of the European Commission, the IMF and the ECB.

Greek-Australian political economist Yanis Varoufakis was confirmed as Finance Minister. Varoufakis describes himself a ‘libertarian Marxist’ and he is well known for his tough line on austerity and his clear determination to renegotiate the terms of the adjustment programme and of the Greek debt. A blogger on the debt crisis, he has said that his “blog posts will become more infrequent and shorter. But I do hope they compensate with juicier views, comments and insights.”

A new ministry overseeing the economy, infrastructure, maritime affairs and tourism – the country’s biggest industries – was created. Giorgos Stathakis, a political economics professor, will be in charge. Another new ministry, overseeing ‘productive reconstruction’, energy and the environment, is headed by Panayiotis Lafazanis, the leader of the Left Platform, a far-left and anti-euro wing of the SYRIZA.

The Ministry for Internal Affairs and Public Administration will be run by Nikos Voutsis. Panayiotis Nikoloudis, the outgoing chief of the Authority for Combating Money Laundering, will head a newly-created anti-corruption ministry.

Panos Kammenos, the leader of the Independent Greeks, was given the defence portfolio. He has been a tough critic of Turkey and has called for tighter restrictions on immigrants in Greece.

The new Foreign Affairs Minister is Nikos Kotzias. He is considered to be a pro-European voice, while his Deputy Minister of European Affairs, Nikoloas Chountis – a former Syriza MEP – has been vocally anti-euro and Eurosceptic.

Panayiotis Kouroublis, formerly a PASOK MP, is in charge of health, and Nikos Paraskevopoulos, a well-respected academic, will be justice minister. Aristides Baltas takes the culture, education and religious affairs portfolio.

35 year-old Gavriil Sakellaridis will be government spokesman. Lawyer Zoe Constantopoulou was nominated as parliamentary spokeswoman.

The cabinet itself is fifteen members strong, and while it is politically diverse, it is exclusively male. In the wider government team there are 35 men and six women.

As well as two independent cabinet members (Nikoloudis and Paraskevopoulos), the junior ministerial team contains more independent members, and representatives of the Ecologist Greens party. Overall, it is a smaller administration than for past governments.

What’s next for Greece? SYRIZA’s programme

In his first cabinet meeting on Wednesday, Alexis Tsipras presented his government’s key priorities.

These include measures to tackle the country’s ‘humanitarian crisis’, restart the economy, take on vested interests, fight corruption and enforce a fair tax system. The new Prime Minister said he would negotiate with Greece’s lenders over the €240bn bailout, but avoiding any catastrophic clashes and seeking to “reduce debt and find a fair and viable solution”.

The new government announced a halt to the privatisation of the port of Piraeus, to the sale of stakes in the Public Power Corporation of Greece and refiner Hellenic Petroleum, and to the planned sales of highways and airports.

Cabinet members have said that they intend to reinstate public sector employees and announced rises in pensions. The government’s full policy programme will be presented in Parliament by 15 February.

The risk for Tsipras is getting onto a collision course with Greece’s lenders, who insist they will not write off the debt. While the new PM maintains that Greece should remain in the euro and that he is committed to working with European leaders to find a “fair and mutually beneficial solution”, in his victory speech he was clear: Greek voters made troika a thing of the past and the “vicious cycle of austerity” is over.

The timeframe is tight. The main issue for the new government will be finding a formula to handle outstanding commitments of €4bn in the next two months, as well as the Greek bonds amounting to at least €6bn, which expire by the end of this summer. The deadline for Greece to qualify for an outstanding sum of €7.2bn, including money from the IMF, expires at the end of February, although this deadline could be extended while negotiations continue.

Exploring ways to restructure Greek debt appears to be the only hope for an agreement. The Finnish Prime Minister, Alexander Stubb, said on Monday that he is firmly against forgiving debt but is “ready to discuss extending the bailout program or maturities”, adding that “this will not change the fact that Greece must continue economic reforms”. Germany’s stance is the biggest question.

Even in the best-case scenario, where Alexis Tsipras succeeds in striking a deal with Greece’s lenders, it is not certain that his party will follow, leading to another period of instability.

What’s next for Europe?

Europe’s leaders will get to know Alexis Tsipras very soon: Donald Tusk, the President of the European Council, congratulated the new Prime Minister and sent an invitation to attend the next European Council meeting, on 12 February.

Aside from economic issues, the new Greek government has already caused a stir by threatening to block on new sanctions on Russia (before eventually acquiescing). The Russia issue is likely to be central to the summit in two weeks’ time, and some diplomats fear that the new Greek government, an alliance of far-left and conservative nationalist right, could turn out to be a Russian Trojan horse in the EU.

SYRIZA’s victory gives some EU leaders other headaches, too. With elections coming up this year in the UK, Spain and Portugal, anti-establishment parties have attempted to present the party’s victory as confirmation of their agenda.

Eurosceptic parties such as Nigel Farage’s UK Independence Party, the Alternative for Germany (AfD) and Germany’s far-left Die Linke may benefit in elections and opinion polls. In Spain, SYRIZA’s sister party, Podemos, is already leading the polls and the country’s centre-right Prime Minister, Mariano Rajoy, has been monitoring SYRIZA’s win with particular concern in view of the Spanish elections to be held in 2015.

Although no strong radical left party has emerged in Portugal, the Socialists interpreted SYRIZA’s win as “a sign of change in the political orientation of Europe, of how austerity policies have reached a limit and of the necessity of new policies”. This message of the need to ‘turn the page’ on austerity has been shared by some Socialists at EU level, such as the leader of the Socialists & Democrats Group in the European Parliament, Gianni Pittella – despite the poor showing of PASOK.

In Ireland, left-wing opposition party Sinn Féin, which is currently supported by 20 per cent of voters according to opinion polls, said that the result of Greece’s elections “could be the spark that fuels the rise of left-wing parties and left-wing governments throughout Europe”.

The presidential election: back to where we began…

The parliamentary elections came as an immediate result of the failure of the Greek Parliament to elect a new President of Greece, and this task will come before the new MPs again shortly.

According to the Greek press, agreement has been reached in the new coalition for the current European Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos, who belongs to New Democracy, to be nominated as the next president.

These rumours comes less than three months after Avramopoulos took up his position in Brussels, but SYRIZA has its own motives – it is said to want Yiannis Milios, the party’s chief economy policy maker, to join the College of Commissioners.

A government spokesperson has denied that there is an agreement on a new president, saying that the government’s priorities are its domestic programme and “to restore the country’s equal position in Europe”.

If Avramopoulos is asked, and approved, a SYRIZA nominee to the Commission would probably not take on Avramopoulos’s portfolio, and would probably get a lowly brief (meaning a reshuffle of portfolios, and more hearings in the European Parliament). However, the risk of taking on a less important portfolio does not seem to concern SYRIZA, whose main objective is to have a say in the European Commission.

Words  Cynthia Sarafianou, Dafni Vlastari; Nicole Ioannidi and Manolis Markoulakis (Advocate Burson-Marsteller Athens)
Photos  (c) European Union 2015; CC/Flickr thierry ehrmann; CC/Flickr dupontaignan; CC/Flickr Trine Juel; CC/Flickr World Trade Organization

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