Thursday, 16 July 2015

Syriza grows up fast

A shorter version of this article was published by Al Jazeera International. 

"We’ve handed the keys to the country over to the Germans,” fulminated Yiorgos Trangas, a practitioner of opinionated radio journalism, as details of Greece’s new deal with creditors emerged earlier this week. 

Trangas roundly summarised Greeks’ feelings. Yet by early Thursday the deal with its accompanying new austerity measures had been passed in a stormy session of parliament by a majority of 229 deputies in the 300-seat legislature, stretching across five parties in both the ruling coalition and the opposition.

Prime Minister Alexis Tsipras (L) with European Commissioner Jean-Claude Juncker (C) and French President Francois Hollande in Brussels over the weekend 

The bill’s passage unlocks the process of approval for an €86bn third financial aid package for Greece, but has crippled the ruling leftwing Syriza party with 39 defections – almost a third of its members of parliament – leaving the party deeply divided.

“We can’t have a government with two majorities,” said opposition socialist lawmaker Evangelos Venizelos. “an anti-austerity majority for the ‘good’ and ‘innocent’ bills and a majority which bears the national responsibility for the ‘difficult’ ones.”

Even Prime Minister Alexis Tsipras, who negotiated the deal in a Marathon, 17-hour session in Brussels, was uncharacteristically apologetic.

“I’m not going to tell the Greek people that I shall come bearing a success story,” he said in a nationally televised interview on Tuesday. “This policy is not helpful to us, but we shall do what we can. People need to understand the alternatives. We reached the end. One alternative was what I did… the second was disorderly default and the third was consensual exodus from the euro.”

Tsipras has said he was "blackmailed" into accepting the deal. This stance has raised serious questions about whether Syriza intends to implement it. "We need the prime minister to tell us if his government undertake the responsibility of this bill and the execution of all that it contains,” Venizelos said.


Four fifths of Greeks have been polled as wanting to stay in the single currency. Earlier this week, seven out of ten said they wanted the parliament to pass the measures.

What rankles with Greeks, however, is that Tsipras was elected to keep Greece in the Eurozone on terms that do not reduce it to poverty. Tsipras played hardball for months, then suddenly capitulated. On Sunday he went to Brussels having asked parliament to pass all the measures creditors had demanded on June 26, when talks broke off. Evidently emboldened by the five-sixths majority Tsipras got with government and opposition support, Germany then asked for much more.

The result is a split in the ruling leftwing Syriza party, or Radical Left Coalition, whose meteoric rise to power under Tsipras was based on presenting itself as an alternative to austerity policies espoused by Pasok socialists and New Democracy conservatives. Many people now see its about-turn as the unravelling of a party whose unity was based on a dream.

Syriza was formed by the coalescence of disparate leftist forces, known as its ‘components’.  Panayotis Lafazanis, who leads the most powerful of them, the Left Platform, predicts doom for the measures rather than the party.

“This agreement may pass through parliament with the help of the New Democracy votes, Pasok votes and The River,” he said, referring to a new, centre-right reformist party, “but it will not get past the people, who will annul it in practice through their unity and their struggles.”

Tsipras took over the party when it held five percent of the popular vote just seven years ago. He won 36 percent of the vote in January, after moving the party incrementally towards the political centre. But he has known that he may have to jettison his far left, and now signals that he is ready to do so.

“I fought this as no one else, and took difficult decisions,” he said in interview. “There is no ideological purity under such circumstances. If someone wants to preserve it, he will also have to shoulder his responsibility.”

A stillborn agreement?

Tsipras did, in fact, bring home something defensible.

Greece is being offered €86bn to finance the government for three years. For the first time, its creditors - the European Commission, European Central Bank and International Monetary Fund - recognise that the spending cuts they are asking for will trigger a recession, so they are offering €35bn for development to offset the ill effects. 

Tsipras is also bringing home a promise to start a discussion on the sustainability of the Greek debt in the autumn. Creditors had promised to do this in 2012, but never did.

“Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far,” warned the IMF in a report on the Greek debt published on Tuesday.

It calls on Greece’s European creditors to offer Greece a 30-year “grace period” before asking it to start repaying the principal on its €321bn debt. Greece should then be given at least 40 years to repay it, the IMF has said.

Hardliners say the deal should be rejected because of austerity provisions Syriza had promised never to succumb to. For instance, Greece has been told to extract another €1.8bn a year from the economy through VAT (or consumer tax). Tsakalotos says he will achieve this by more efficient collection and by extending VAT to private education.

Lafazanis disagrees. “The changes to VAT mean the Greek people will pay an extra €2.4bn a year… while €850mn a year will be lost from main pensions as people are asked for larger copayments to national health,” he says.

Alternate Finance Minister Nadia Valavani, responsible for tax collection, resigned on grounds of principle. In a letter she wrote on Monday, while talks were ongoing, but made public on Wednesday, she calls the measures “stillborn”.

Like many Greeks, she believes that Germany’s goal was “the complete humiliation of the government and the country”.

Scheauble hadn't intended to humiliate Greece,” says psychologist Alexandros Ioannidis, “Greece humiliated herself by being totally unreliable and irresponsible.” He believes Tsipras’ five month-long negotiations were “a way of hiding his total unpreparedness and improvisation. Only, this cost some tens of billions euro to the Greek people.”

Like many Greeks, particularly educated urban, middle-class professionals, Ioannidis is furious with Syriza for toppling the previous conservative government, which had managed to produce two balanced budgets and primary surpluses, and was selling debt successfully on money markets for the first time in four years.  

The conservatives lost after it was revealed that their finance minister, Gikas Hardouvelis, had considered implementing pension cuts and improved VAT collection worth €980mn this year. The deal Syriza brought to parliament this week involves an estimated €12bn in austerity measures over three years.

Ioannidis believes Syriza’s problem is not political but psychological. “The well-known Greek tendency of always blaming others for one's grave faults is simply unforgivable, and in psychiatric terms is simply paranoid,” he says.

Accelerated political decrepitude

Tsipras is now in danger of being abandoned by key constituencies. His rise to power has been partly backed by the public sector, the country’s largest, best-paid and best-organised workforce, which still enjoys lifelong tenure. At a billion euros a month, it is also the government’s second-biggest expense after pension subsidies, absorbing a fifth of the budget.

Even though he made good on a promise to hire back nine thousand state employees sacked by the previous government, Tsipras has now suffered two, one-day strikes by ADEDY, the state workers’ federal union. This is partly because

The union has managed to make preservation of its privileges synonymous with standing up to Germany, which Tsipras’ left-wingers support.

“There is a prevailing theoretical difference between those who believe that all disagreements can be solved through the European legal framework, and those who believe that the legal framework is a new colonialism under the leadership of Germany,” says Yannis Schizas, leader of the Radical Ecologists, one of Syriza’s leftist components Tsipras has lost the support of.

“These colonial forces want to reduce the southern states, and especially Greece, into the status of a second class country,” he says. By and large, Syriza’s left wing sees a return to the drachma as a return to sovereignty.

Like Lafazanis, Schizas predicts an unimplementable law. “There will be resistance on each individual measure,” he says. “Second, there will be an invisible economy... More tax evasion and more black economy - that will be the result.”

Nonsense, says Ioannidis. “Of course the new deal can only be implemented with enormous difficulty,” he says, “but Scheauble is only partly to blame. The main responsibility is due to the incapacity of the Greek political elite of the last five or six years, but also to the extreme immaturity of the Greek people, who did not understand that the fake prosperity they enjoyed would come to an end eventually, which it did; and now they want it back, at whatever cost.” 

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