On 12 July 2015, the Greek Prime Minister Alexis Tsipras and the ruling SYRIZA party crossed their own Rubicon. The signature of a third bailout program – known in Greece as the third Memorandum – signaled yet another realignment in Greek politics by blurring the erstwhile distinction between (cautious) supporters of Troika-led reform and its vociferous opponents. SYRIZA’s leadership blinked when the prospect of Grexit became very real and following the imposition of capital controls that threatened to struggle the anemic Greek economy. When a series of laws in compliance with the 12 July agreement came to Parliament, pro-EU forces from diverse parties backed Tsipras, leading to comfortable majorities in favor of the new program. However, many of his former comrades within SYRIZA refused to go along, and the ruling coalition became dependent on the opposition to legislate. Tsipras wasted no time in calling for an early election set to take place on September 20th. An interim government has already been sworn in, and although such an administration is only meant to play a caretaker role, Greece’s challenges may force it to take action on a few important issues. Foremost among them are the migration and refugee crisis, whose explosive character is a matter of concern throughout Europe, and the country’s fiscal situation, which has been suffering the consequences of capital controls for the last two months.
SYRIZA’s leadership blinked when the prospect of Grexit became very real and following the imposition of capital controls that threatened to struggle the anemic Greek economy.
By voting against the bailout program and deciding to continue the self-proclaimed “anti-memorandum battle,” radical forces within SYRIZA declared their allegiance to the pre-July 12th SYRIZA’s political stance and are already causing Tsipras a massive political headache. They are currently represented by 25 MPs and chances are that they will be represented in the post-September 20th Parliament too. Greek voters are thus faced with new choices and will be granted little time to digest the implications of their voting preferences. SYRIZA has bowed to the inevitable, and will need all of its leader’s popularity to remain in power after September 20th. The centrist opposition parties feel vindicated and seek to corner Tsipras. Their credibility remains very low, however, as their record in office is still very fresh and a large part of the population continues to associate them with punitive austerity. Moreover, they have little time to deconstruct SYRIZA’s discourse on a “courageous fight” and an agreement more palatable and less painful than the previous ones. Meanwhile, populist parties on the extreme right and left are counting on the continued support of disgruntled, confused, and fearful voters who find it easy to blame external actors for all of the country’s (large and visible) problems.
After the snap election, a coalition government looks all but inevitable and the Greek political class will face yet another serious test of leadership. To keep the country together and absorb the pain associated with the new program’s provisions on public expenditure and social security reform, reformist parties will have to build a solid parliamentary majority and move swiftly to counter-balance austerity with civil service reform, tax justice, and poverty relief.[1]
Will reformist parties succeed? Their pre-election rhetoric and political discourse during the crisis leaves little room for optimism. While there is little doubt that austerity-driven reform is a recipe for disaster, reformist parties still maintain some room to maneuver around it and at least make sure that the cost is shared by the weak and powerful alike. To illustrate, while the July agreement necessitates fiscal consolidation, moving towards a more efficient tax system premised on a more equitable distribution of the costs would go some way towards restoring the political class’ credibility vis-à-vis the population. Yet all four parties remain vague in their promises and are keen to continue a mutual blame game that, although normal in pre-election times, will make coalition-building after the election more difficult.
Plans for Grexit have been put on the back burner due to the July 12th agreement, but it would be a mistake to think they have been withdrawn.
Greece’s international creditors have welcomed the snap election. This was a bit of a surprise, given the uncertainties discussed above. However, there is a belief in Brussels as well as in major EU capitals that the election can help clarify the political situation and potentially lead to a solid, pro-reform majority. This is possible, but uncertain, as the new Parliament is expected to host a record number of political parties (up to nine), making the coalition-building process ever more difficult. Crucially, implementing the latest program is a sine qua non for the release of new funds to Greece, and the creditors will insist on swift and effective implementation prior to any new release of funds. European Commission President Jean-Claude Juncker has made this abundantly clear already, communicating with the interim Prime Minister Vassiliki Thanou and requesting the full implementation of the agreement even by her caretaker administration. Plans for Grexit have been put on the back burner due to the July 12th agreement, but it would be a mistake to think they have been withdrawn. Whether they will resurface or not will depend on the political message that Athens will send to its creditors as soon as the September 20th election results are in.
SYRIZA sought to change the political landscape not only in Greece but also in the EU. The limits of its approach have now been brutally exposed, and there is profound uncertainty as to the country’s future direction. The Greek political class has displayed a high degree of immaturity throughout the last five years, despite the fact that different government constellations have been tried and tested. Its ability to keep on wasting time in search of miracle-like solutions to the many problems it has helped create, has now ran out.
[1] SYRIZA, the center-right New Democracy, the social democratic PASOK, and the liberal River, can be considered as pro-reformist parties.