Can Europe Make It?

Syriza's limited options

Unless Syriza changes its rhetoric now and unless it explains the facts about the EU and the economy, it will be incapable of justifying any of these decisions to its voters several months down the line.

Pavlos Eleftheriadis
26 February 2015

Alexis Tsipras with Independent Greeks leader Panos Kammenos. Flickr/sher xla. Some rights reserved.Syriza, the Greek radical Left party, won power in January promising an end to austerity. Many commentators in Europe believe that on this basis it must be an anti-austerity party.

They are wrong. Austerity is only a small part of its platform. Syriza originates in a coalition of anti-capitalist, Marxist and leftist groups. Its main emphasis is hostility to markets and to globalisation.

Syriza has some mainstream commitments: it defends rights of immigrants and minorities, criticises social and political inequality and seeks to curb the power of the oligarchs. But its overall message is overwhelmingly one of nationalist and anti-market populism, where the Greek people are always the victim and the enemies are either foreign or rich, or both.

Syriza rejected the bailouts of 2010 and 2012 as ‘neo-liberal’ assaults, as ‘imperial’ impositions on Greece and its people for the benefit of banks and ‘speculators’. This is why Syriza’s leaders constantly speak of Greece as a ‘debt colony’ of the EU (which is the title of the new Foreign Minister’s most recent book).

Syriza accused all the parties that voted for the two bailouts, which kept Greece in the Eurozone and rescued the economy from disorderly default with far worse consequences, as complicit to the ‘barbarism’ of the ‘memorandum’ and as direct perpetrators of a ‘humanitarian crisis’.

This is why Syriza chose to go into coalition with the far Right party ‘Independent Greeks’, whose main campaign theme has been opposition to the bailout as well as anti-reform and anti-immigrant populism. Syriza chose them over the new centre-Left party ‘To Potami’ (of which I am a member) even though To Potami campaigns for social justice on a pro-EU, and anti-corruption programme of reform. 

Having chosen this route, Mr Tsipras spent the first few weeks of his term antagonising Greece’s EU partners. When he addressed Parliament during his government’s vote of confidence he stated very forcefully that his government would not ask for the extension of the bailout deal, which was due to expire at the end of February.

But this attitude quickly backfired. Greece’s economy needs financial support if it is to stay in the Eurozone. Without a funding deal the Greek banking system would have sooner or later collapsed. Confrontation could not change this fact. Tsipras had no choice, just like the previous governments had no choice. It was either the bailout deal, or bust.

On 20 February, Greece reached quite an extraordinary agreement with its Eurozone’s partners. Syriza requested an extension of the bailout deal after all. There is no debt cancellation. The review by the troika will continue - as long as everyone calls it ‘the institutions’.

Most importantly, no money is forthcoming without completion of the review of the programme as it stands. So Syriza has in effect embraced the programme of austerity agreed by its predecessors, in exchange for promises for reducing the fiscal targets for 2015, which were unreachable anyway.

But now Syriza is faced with two mortal dangers.

The first danger is that it may be too little, too late. Now that it has opted to stay in the Eurozone, it will have to comply with all the requirements of the deal. Syriza will need to proceed with fiscal discipline and structural reforms of the Greek economy, as required - in return for more funding so as to improve competitiveness within the currency union.

But Syriza does not seem to have the desire or even the know-how for respecting fiscal discipline or promoting structural reforms. Its early policy steps have been either decisively anti-reform or entirely shambolic. But if the government fails to deliver on the bailout terms, a disorderly exit beckons, with disastrous consequences.

The second danger is that the party may split. Many of its most prominent members will not follow the leadership down its new path. Some inside the party have already started denouncing the leadership for its ‘neoliberal’ turn. For example, one of the Party’s most prominent politicians, the celebrated resistance fighter Manolis Glezos who is currently a Member of the European Parliament, has ‘apologised’ to the Greek people for ‘participating in the cultivation of ‘illusions’ by his party.

What can Syriza do? As far as I can see, it has three options.

The first option is to pretend that nothing has changed. In his public statements so far, Tsipras seems to have chosen to do just that. He has publically spoken of ‘success’ and claims that some kind of honourable compromise has been achieved. The party says that some elements of its original programme will go ahead. It also keeps up the poisonous rhetoric.

After the agreement was struck Tsipras stated that the agreement was a ‘victory’ for Greece and that it marks an ‘end to austerity’. He claimed that his party’s success in these negotiations proves that ‘Europe is a domain of negotiation and mutually beneficial sustainable compromise not a terrain of annihilation, submission and blind punishment’.

And he added: ‘For this reason, yesterday may be a more important day for Europe than it is for Greece’. The clear implication is that until Syriza came to power, Greece was being dominated, punished and ‘annihilated’ by its partners. Those who listened to those words within Greece, would have found them entirely familiar. Tsipras’ speeches for the past five years have been full of denunciations of the ‘barbaric' pro-'memorandum’ governments.  

To the surprise of many, the majority of the larger Greek media - most controlled by powerful businesses - have not dwelled on this major transformation. I suspect they did so out of fear that if they criticised the new government too much, bad things might happen to their owners’ business interests (the new government is working to appoint new management to all major banks).

But this attitude will infuriate further Tsipras’ critics inside the party, who will persist pointing out the similarities between Mr Varoufakis’ policies and his predecessor’s. It certainly does not help Mr Tsipras that all outside observers think otherwise.

For example, Reuters immediately reported the deal as a ‘major cimbdown’, whereas the Guardian spoke of Tsipras’ having to ‘bow to German-led pressure’. These reports are widely reproduced in Greek websites, both in English and in Greek. So whatever the government’s spin and however much the Greek media help out, the fact that Mr Tsipras has accepted austerity under the existing ‘memorandum’ cannot be hidden for long.

A second option would be to break free from the bailout deal by seeking further confrontation and truly risking a disorderly exit. Tsipras may conclude that staying inside the Euro under these terms is not worth it after all. So he could test the resolve of Greece’s partners further, hoping he may extract further concessions. This way he could protect his party’s unity and his own authority, since his retreat on 20 February will appear only a tactical move.

This was more or less what he said to one of the major critics of the deal, the composer and fiery nationalist Mikis Theodorakis. Tsipras said: ‘when one is fighting a war … one has to evade an opponent’s trap, one has to be flexible …’ Yet, this would be an incredibly risky option. Greece is truly isolated. It is very hard to imagine any change to the funding conditions. And a disorderly default would destroy the banking system, cause irreparable damage to the economy, cancel all the gains of the fiscal consolidation of 2010-2014 and end Tsipras’ career. So this route risks bringing about a nightmare both for Syriza and for the Greek people.

The third option is the least plausible one, but the clearly preferable, at least for reform-minded Greeks. It is to complete the transformation in the fullest possible way. Syriza could just abandon the anti-capitalist rhetoric, embrace the idea of a free market and of a modern welfare state and proceed with making Greece a fairer society and a more competitive economy inside the Eurozone. It could then argue for an overall reform of the Eurozone’s architecture as a broader European question, not as an issue of narrow Greek vindication.  

If Syriza loses some of its Marxist or anti-EU members of parliament along this way, it could seek the help of To Potami or PASOK or New Democracy to move its most important reforms through parliament. Given its present majority alongside the Independent Greeks, Syriza will not need to form a new coalition to achieve this.

Syriza could achieve so much that the previous governments did not have the courage to do. It could immediately launch a competition for the television licenses and strengthen the regulation of electronic media so as to reduce the power of the oligarchs over the news, amend the electoral system to reduce the size of constituencies, take steps to create an independent and meritocratic civil service as well as extend the social welfare state to protect the very poor (e.g. even today 90% of the unemployed receive no help from the state whatsoever). There is so much that needs to be done to break the old clientelistic networks and turn Greece into a modern European country.

Alas, the most likely scenario is that Syriza will stick to the first option. In the short run it will seem safer. And for a while it may work, as the party remains united by power and its privileges. Yet, sooner or later time will run out. The government will have to raise some taxes, adjust pensions or privatise public assets as well as liberalise product markets and closed professions, under the terms of the deal it has signed or the new long term deal it is almost certain to have to sign by the end of June.

Unless Syriza changes its rhetoric now and unless it explains the facts about the EU and the economy, it will be incapable of justifying any of these decisions to its voters several months down the line. Rhetoric and reality will then collide with some force.

If and when something like this happens - and I hope it does not - it will not be a pretty sight.

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