Tsipras’ responsibility… and Europe’s also

Alexis Tsipras, Prime Minister of Greece. Elcano Blog
Alexis Tsipras, Prime Minister of Greece. Elcano Blog
(Alexis Tsipras / Facebook)

Alexis Tsipras, who will be the new Greek Prime Minister, and his radical-left coalition Syriza emphatically won last Sunday’s election, although two seats short of an absolute majority. For the first time one of the so-called populist movements, in this case from the left, has won a general election in a country of the EU, reflecting the revolt at the polls of the losers in the crisis and their rejection of extreme austerity. But there has also been another novelty: the neo-Nazi Golden Dawn has taken third place. Nothing will be easy, but blood does not necessarily have to be spilt with Europe. Instead of a storm we might see negotiations taking place. Tsipras has a great responsibility ahead, both to his constituents and to Europe. But Europe is also responsible for what has happened and for what may happen.

As the Financial Times comments, Tsipras will have to choose between being a realist or a radical. His first moves after winning the election –and also his behaviour during the past few weeks– suggest he will tend more towards being realistic. Being a realist also means overhauling the Administration and putting an end to the partisan cronyism and corruption that were fostered for years by the conservative New Democracy and the socialist PASOK. Tsipras has promised that civil servants will be selected on the basis of merit. He will have to rebuild a large part of the state’s institutions and build a tax system worthy of the name. And to do so from outside the establishment might be the only way, but it is still in some doubt whether Syriza will be up to the task. Will Tsipras become the great reformer Greece needs? It is certainly in the interest of the entire EU that he should succeed.

Being a realist, of course, means giving an answer to the problems that ultimately led him to win the elections and to alleviate the suffering of many Greeks who have seen GDP cut by 25%, pensions halved and unemployment run out of control. This implies distancing himself –but how much?– from the extreme austerity policies implemented since 2010. His three main objectives are to end austerity and to support the helpless, to renegotiate the debt and to boost growth. But whatever he does he cannot do it by himself if he wants to generate the confidence necessary for the flow of vital domestic and foreign investment. He will need the help of Europe, of European countries and of the EU’s institutions, starting with the European Central Bank, which for the time being has left Greece outside the quantitative easing programme, pending clarification of Greece’s negotiations with its creditors. For that reason, neither Tsipras nor Syriza can afford to be an anti-European. Syriza has spoken of leaving NATO, but the issue now seems to have forgotten. As suggested by a comment on Bloomberg, ‘Syriza is sacrificing its revolutionary ambitions to the overriding goal of getting better terms for Greece’s economic aid package’. Anything else would be radicalism.

Being a realist means putting restructuring Greece’s debt on the table, but not –at least not yet– angling for a remission, that will not be accepted. Before holding a European conference on debt, as requested by Tsipras to condone part of it, Syriza is calling for a moratorium on the payment of interest (which accounts for around 20% to 25% of Greek public expenditure) in order to devote the funds immediately to social welfare and to growth. Greek debt is not as unsustainable as some claim but it does suffocate the economy.

The winds have changed, and the EU itself –or the Eurozone institutions– have a great responsibility in avoiding a storm, and to do that they will have to have respect for Greek dignity. Even the Finnish Prime Minister, Alexander Stubb, who is tougher than Angela Merkel in this regard, suggested in Davos last week the possibility of a new revision of Greece’s debt in terms of deadlines and programmes, but rejected any thought of default and the very idea of restructuring. Brussels and Frankfurt seem willing to give Tsipras some elbow room: a bail-out extension and perhaps increasing the credit line for a few months to allow some time to negotiate. But restructuring will come. And Tsipras has an ace up his sleeve: nobody, including the Greeks, wants Greece to exit the euro because nobody knows the consequences of such a precedent for the overall stability of Monetary Union and of the EU itself. Tsipras must be responsible for not capsizing the ship of monetary-union, although Greece admittedly weighs a little less now than it did four years ago. And even if creditors yield, they will not do so for nothing in exchange and they are therefore likely to demand more reforms.

‘Change Greece, Change Europe’, said some of the banners in one of the election’s final rallies. And indeed, that is the question. The idea of extreme austerity is losing strength in Europe and in the IMF. Draghi’s announcement of a quantitative easing of €1.1 trillion also implies a change. And this is the case too with the extension of the deadlines for compliance with the deficit targets and turning a blind eye to the overflowing of some countries’ national debt.

Once in office, Tsipras will also have to turn Syriza into a real political party, as it remains a motley coalition of radical groups despite already governing a number of municipalities and regions. Furthermore, the question is whether he will be able to keep his own MPs in line. In any case, he will receive –and has already received– some support from European social-democrats such as Renzi, who has seen his counterparts sink in Greece and who realises they may do the same elsewhere in Europe.

Although the party system has been shaken to its foundations, the conservative New Democracy party has held firm, having lost less than two points since 2012. Nevertheless, rivals have appeared in the form of the centrist To Potami (‘The River’) and the right-wing Independent Greeks (ANEL). The latter, nationalist and anti-austerity, have already agreed to form a coalition with Tsipras. Ultimately, the significant factor is that a representative of a party to the left of social democracy will sit on the European Council for the first time ever. The situation in Spain and Greece is different but Syriza’s results are a boost to Podemos, although much will still hinge on what Tsipras will be able to achieve or not.