Could brinkmanship on Greece’s left deliver the country from austerity? BY WILLIAM RAILTONON JANUARY 4, 2015

“Greece is not run through democracy now, it is run through a Troika. Three foreign officials that fly into Athens airport and tell the Greeks what they can and cannot do.”

Almost two years after this criticism of European hegemony was voiced by an MEP in the European Parliament, Greece finds itself heading into an election which could result in renouncing its austerity measures and leaving the Euro.

On 25th January, Greeks will go to the polls once again, following the Greek parliament’s rejection of Prime Minister Antonis Samaras’ presidential nomination.

Opinion polls predict victory for the young, leftist party Syriza. Formed of a coalition of National Socialists, greens and Maoists and others, Syriza’s popularity owes to its pledges to raise the minimum wage, end privatisation and reverse the austerity measures which Greece consented to as part of its $240bn bailout by the EU and IMF.

Campaigning on television this week, three of Syriza’s MPs, including economic adviser Yiannis Milios, indicated that unless the conditions of the Europe’s bailout can be eased, a government headed by Syriza would stop making repayments to foreign creditors on its debt. Fears of a default on these repayments have scared markets.

In an interview with the Rosa Luxembourg Foundation in March 2014, Milios said that in Greece “public debt is used as a vehicle to increase the power of the ruling classes and the very big corporations and to deprive labour rights and income from the masses” by dismantling the welfare state and cutting wages and pensions.

For the last 4 years, social conditions have been difficult in Greece. Disenchantment with Europe is a view shared by the squeezed middle and unemployed youth alike. So long as Greece’s fiscal policy is dictated by the so-called Troika (the IMF, the ECB and the European Commission), real growth is a pipe-dream.

The Greek political establishment is very worried about what might happen in three weeks’ time. Rather than strengthening the Greek negotiating position, members of the current government believe that stopping repayments will lead to Greece’s exit from the Euro. Greek newspaper Ekathimerini reported that on Wednesday, Prime Minister Samaras, head of the ruling conservative party New Democracy, described Syriza’s agenda as “the most official program guaranteeing poverty that the Greek people have ever heard in an election campaign”.

If Greece’s political shift to the left could be expected, it is surprising that Syriza is leading the charge. A victory for Syriza is a prediction few would have made before the bailouts.

Since the 1980’s, the Greek centre-left has been represented by Pasok, a popular social-democratic party which was the main partner in the Greek coalition government until 2012. However, Pasok was ousted during the election for the poor role it played in negotiating the austerity imposed by Europe. Pasok currently languishes with 5% of the vote but Syriza was doing even worse in the polls back in 2009 (4%), before the young radical Alexis Tsipras led the party to victory in last year’s European elections, winning a 27% share of the vote – 4% more than its rival in government, New Democracy.

The real question is: Can Syriza’s threat of a ‘Grexit’ force Germany to lessen austerity measures?

There was a time when a Grexit was unthinkable. When the second bailout was issued in 2012, Greece’s default threatened to bring down Spain, Ireland, Italy and others with it; a total Eurozone collapse. Some commentators are still arguing that Greece’s exit in 2015 would trigger a selloff of peripheral bonds, undermine the ECB and threaten the Euro much to the same extent.

However, in an interview with Rheinische Post newspaper, a senior member of Angela Merkel’s party, Michael Fuchs, has unequivocally denied that Greece’s “blackmail” would work this time. “The times where we had to rescue Greece are over. There is no potential for political blackmail anymore. Greece is no longer of systemic importance for the euro.”

Syriza’s victory is by no means certain. Polling data suggests that no party will emerge with an outright majority. A poll cited in the Financial Times has suggested that 5% of the total vote might even be stolen by ex-PM and former Pasok leader George Papandreou, who has established a new centre-left coalition. The left’s vote would be split and the government would cling to power.

But Syriza is not alone. The rise of Podemos (which translates as “We can”), a Spanish leftist party, is symptomatic of political parties on the left breaking into the mainstream. The wave of populist parties gathering support since the economic crisis has come predominantly from the right, but not exclusively.

Economic protectionism and a tough stance on crime and chiefly immigration (albeit to very different extents) have characterised the policies of right-wing parties appealing to the politically disillusioned. With the rise of Syriza and Podemos, it would seem that nationalism and euroscepticism are attitudes which the left and right could hold increasingly in common in the future.

After all, the MEP who stood up in 2012 to attack the Troika’s dictatorship of Greek policy was UKIP’s Nigel Farage.

As these parties become established as more than just a protest vote, they will find themselves under increasing pressure to show that their ideals can be transformed into workable alternatives.

We will have to wait until after 25th January to see if Syriza can deliver.

Resolve the Real Greek Crisis (New York Times)

By EDWARD P. JOSEPH and ANNA TRIANDAFYLLIDOU

Published: February 5, 2013

Resolve the Real Greek Crisis

FOR Greeks suffering from the wrenching pain of a long economic crisis, a youthful savior has emerged. Alexis Tsipras, the leader of the second-strongest party in Parliament, the Coalition of the Radical Left, or Syriza, is not yet 40, but his relentless attack on austerity has made him a favorite to head the next government.

Tsipras has been visiting power centers in Europe and the United States to bolster his credentials and to press his case for debt relief. He argues that Europe is bluffing with its threat to expel Greece from the euro zone if it doesn’t implement severe cuts.

But even if Tsipras wins the next election, he is likely to fail in his bid for an international conference that would provide dramatic debt relief. The reason is that Greece’s main creditors, Germany in particular, suspect that Tsipras is bluffing as well. They know that the Greek economy hangs like a thread, and that failure to sustain debt relief would plunge Greece into economic free fall.

Thus the impasse over Greece that serves as a brake on Europe’s recovery and has left a quarter of Greeks unemployed is likely to continue — unless Tsipras widens his message. He could wring substantial concessions out of Germany and other creditors if he does what no Greek leader has managed to do: get Greeks to accept the need for national reform, not just austerity and not just debt relief.

The truth is that Greece is not only broke, it is broken. “Uncompetitive” does not describe the pathology of the Greek economy. It is a myriad of small businesses, unproductive subsidies, inflated state contracts and Byzantine regulations seemingly designed to inhibit productivity. In the past, it was sustained by tourism, olives and other small-scale produce, and, of course, loans — which have evaporated. Real relief for Greeks can only come from foreign investment, not loans and not debt relief. And few will invest in Greece without real reform. Indeed, some of Greece’s most successful companies are fleeing the country.

Ironically, even as segments of Greek society still unleash noisy protests, the public knows the truth: They are not innocent victims but willing, if small-scale, participants in a corrupt system. This helps explain why expressions of public anger have been — given the breadth of the disaster — relatively tame. A protest movement known as the “aganaktismenoi,” or the resentful, has emerged, demanding accountability. Long-concealed scandals have come to light, and some prominent members of the political elite have gone to prison, or face the prospect of being jailed. But there is no unifying agenda among protesters, many of whom are animated solely by the prospect of losing their benefits.

Moreover, for all their suffering, most Greeks are aware just how much worse their situation could become. They understand that they have a lot to lose if the country’s fragile banks collapse or if the country defaults. The value of their euro-denominated bank accounts, if converted into new drachma, would plunge.

If anything, anger in Greece is focused outside the country, at Germany in particular, or disgracefully, on the most vulnerable people — poor immigrants — who have benefited least from the country’s corrupt system. Either way, the misdirected anger only distracts Greece from much-needed introspection. And even when there has been reflection, such as the momentary pause in the spring and summer of 2010, Greece has been plagued by the paralysis of collective responsibility: “So maybe I didn’t pay my taxes, but who did?”

The focus of Greek energy these days is not on how to fix the country, but rather on how to survive within the existing system.

At their core, Greeks know better and are not condemned to perpetual cynicism and incipient poverty. They need a leader with the courage and the standing to tell them that the old ways of doing business will not return prosperity.

Greeks have proven that they can move toward meritocracy, as has been illustrated by the general public exam for public administration or university admissions. The unique aspects of Greek culture have their advantages and need not be discarded. Small changes, for example simplifying regulations and putting more information on legislation on the Internet, can have a big effect.

These measures can pave the way for consensus on the larger labor reforms demanded by creditors, very possibly winning the major concessions that Tsipras seeks. Soon, with support from civil society and the Orthodox Church, momentum toward national renewal could reach a tipping point, where the rewards of complying with rules will outweigh flouting them.

In short, Greeks do not have to “become Germans.” They only have to face up to the fact that you can’t get something for nothing forever. A politician with the courage to speak this truth and appeal for a new compact that matches individual and business responsibility with concrete steps toward state transparency can win an election, debt relief and real hope for a battered people.

Edward P. Joseph is senior fellow at the Johns Hopkins Center for trans-Atlantic Relations. Anna Triandafyllidou is professor at the European University Institute.