The New Greek Government: Neither Left Nor Right Turn, But Wrong Turn

Historic Move?

‘The people of Greece wrote history’, shouted Mr Alexis Tsipras to large crowds of jubilant supporters in Athens, as the counting from Greece’s Sunday general election was completed and it became clear that he would become the next prime minister. On that score, he was certainly right. The people of Greece did write history, although, to paraphrase Karl Marx who no doubt is admired by Mr Tsipras, they wrote history first as a tragedy, and then as a farce. Mr Tsipras’s encounter with history is only just beginning: his vow to reject the economic austerity measures imposed on his country as a precondition for staying in the Euro currency zone puts him on a collision course with the European Union and condemns the continent to many months of political uncertainty. The omens do not look good, and Mr Tsipras’s first days in office give no room for optimism either.

With his youthful good looks and excellent debating skills, 40 year-old Alexis Tsipras is clearly his party’s biggest asset. His informal dress sense and cheeky behaviour (he refused to wear a tie even when meeting the Pope) attracted anti-establishment voters, while his promises to put an end to financial austerity attracted the support of Greece’s middle classes, who have seen their assets pulverised by an economy which contracted by a quarter since the Euro financial crisis started in 2010, the sort of economic disaster other nations only experience in wartime.

In purely electoral terms, Syriza’s victory is not as convincing as it appears. The party secured only 36.5 percent of the votes cast, and Alexis Tsipras now controls 149 parliamentary seats – two short of an overall majority in the 300-seat legislature – only because of a quirky provision in Greek law which automatically awards the leading party 50 extra seats in order to avoid inconclusive electoral results.

The Moderate that Wasn’t

Political observers expected that, immediately after the votes were counted, Mr Tsipras would lower his confrontational tone with Europe. After all, the new Greek leader wants his country to remain in the Eurozone and soon needs to repay €7 billion of old debt with money he does not have.  This requires the new Greek prime minister to be nice to the 19 governments which operate the Euro, for, without their unanimous support, Greece could go bankrupt within weeks.

Instead, Mr Tsipras used his victory speech to repeat his vow that ‘Greece is leaving behind catastrophic austerity.’ ‘The troika for Greece is the thing of the past’, he added, referring to the country's biggest international lenders - the European Union, International Monetary Fund and European Central Bank. This will set him on a collision course with German Chancellor Angela Merkel, the leader of Europe’s biggest economy, who is adamant that Greece must follow its painful programme of spending cuts and tax increases if it wishes to continue having access to EU funds.

To make matters worse, Mr Tsipras quickly formed a coalition with the Independent Greeks, a viscerally anti-German party that seems to be spoiling for a showdown with Germany over Greece’s debt. The first move taken by the new government immediately after it was sworn in was to shatter European Union unanimity over sanctions on Russia, just at the moment when Russian troops are engaged in a direct, audacious and brutal campaign in eastern Ukraine. At least in this respect, Mr Tsipras adheres to an old Greek tradition: whenever they wish to blackmail the rest of Europe in order to obtain something, Greek politicians threaten to tilt towards Moscow if they do not get their way. Presumably, the Greeks do not care whether one country occupies another in Europe, as long as that country is not Cyprus where, of course, the Greeks demand total European solidarity of the kind they never offer in any other crisis.

Possible Compromise?

Dr Merkel is anxious to avoid a confrontation that portrays Germany as the brutal proponent of austerity, so she will try to be flexible in the days to come. But she faces pressure from her own parliamentary backbenchers not to give in to Greek demands, and she is also aware that any concessions offered to Greece will immediately have to have to be offered to all other needy European countries as well, blowing an even bigger hole in EU finances.

So, if the new Greek government persists in rejecting the austerity conditions, it risks ruin and eviction from the Eurozone.  Mr Jens Weidmann, the president of the German Bundesbank, the country’s national bank, has already fired the first warning shot by expressing a ‘hope’ that Mr Tsipras ‘will not make promises he cannot keep and that the country cannot afford’. The threat is implicit, but very real, since capital is already fleeing from Greek banks which remain dependent on nearly €50bn of emergency financing, much of it from Germany.

Still, the new Greek premier is not devoid of friends in Europe. While leaders throughout Europe fear the rise of Mr Tsipras’s brand of populist politics, centre-left governments in Italy and France hope to join hands with Greece in toning down current austerity policies; French president Francois Hollande’s congratulatory message to the new Greek leader was particularly effusive in its references to the ‘historic friendship’ between the two nations.

Mr Alexis Tsipras also has some room for manoeuvre. For the first time in decades, the Greek budget has recorded a small surplus, and he may persuade European lenders to lower the interest they charge on Greek debts. But these will be small concessions, rather than fundamental ones; the choice facing Greece remains one between austerity and bankruptcy.

Either way, a new chapter of European instability is about to begin. And Greece will soon discover whether its newly-elected prime minister is really the shrewd acrobat he claims to be or, as the leader of another Greek party referred to him, is more like ‘a political version of Harry Potter’, a man who makes promises that can only exist in fantasy.