An election without aspirations in Greece

This article was published by Al Jazeera International.

Ahead of Sunday's snap vote, both front-runners are vowing to stay in the Eurozone - and that means continued austerity.

Athens, Greece - Former prime minister Alexis Tsipras is attempting to turn adversity to advantage.

His capitulation to European Union-imposed austerity policies, which he had vowed to abolish before being elected, split his Syriza party like an iceberg adrift in the tropics. Tsipras lost the support of 39 of his 149 parliamentarians when he brought Greece's third bailout agreement home on July 16.

When he presented the first implementation bill to parliament on August 14, the defections rose to 44. Six days later, he resigned and called for a snap election.

In both votes, Syriza failed to muster the 120 MP threshold considered necessary for a major piece of legislation to be constitutionally sound. That's because ruling parties must have the support of at least 120 of their own MPs in votes of confidence. Failure to reach this threshold in a major bill is an indirect censure from one's own side.

As Tsipras laid bare in a televised debate on Monday, however, the decision to resign seven months after coming to power was also the result of opportunism. 

"In the previous election we got 149 [seats in parliament], when there was a danger of leaving the euro. Now that that danger is gone … we can get the two extra MPs we need," he said, referring to the 151 absolute majority a party needs to rule in Greece's 300-seat legislature. 

Syriza leapfrogged to power by triggering early elections, as the austerity crisis wore down Greece's traditional power-brokers - the socialists and conservatives.

It jumped from 16 to 26 percent of the vote in 2012 by refusing to join a conservative-led coalition, leading to a hung parliament and repeat polls. It came to power with 36 percent of the vote by refusing to support the conservatives' choice of president this year, triggering another premature election.

Still in favour

When Tsipras resigned on August 20, Syriza was still riding above its January performance in some polls, though its support was dropping fast. The party's hopes of retaining power are now pinned on Tsipras' modest and telegenic personality.

"He's young. He's honest. He hasn't been in power long enough to be corrupt," says Katerina, an out-of-work hairdresser from the western Athens suburb of Aigaleo. "It's the other parties brought Greece to this pass over 40 years. I shall never vote for them again."

She forgives him his negotiating stumble with Europe's debt-collectors, saying "it was clear that he wasn't ready, but there were interests in Greece and abroad that wanted him to fail".

"There was never an alternative [to austerity]," says Nikos Divis, a pensioner, who believes Germany's Christian Democrats led a pan-European crusade to eradicate the emergence of the left in southern Europe.

"The Europe of solidarity and partnership doesn't want solidarity… It's all about who will strangle whom."

Despite the unpopularity of austerity, four-fifths of Greeks still favour remaining in the Eurozone. Both frontrunners - Syriza and the conservative New Democracy - are now pro-Euro parties vowing to do what it takes to keep Greece there, and that makes them pro-austerity.

"The Greek people are humbled, exhausted and deeply disappointed. They just want a bit of peace," says Petros Raptis, a film-maker and lifelong leftist, who believes the fighting spirit that elected Syriza to overturn austerity last January has evaporated.

"[Greeks] will no longer elect Tsipras in the ordinary sense. They will give him not so much a mandate as a vote of tolerance." 

'Logic of no growth'

There is a true alternative to austerity propagated by Popular Unity, a party made up of former Syriza backbenchers. It says prosperity is not possible within the Eurozone, because creditors will not allow Greece to do what it must to properly restructure its economy.

"The debt ends up shaping the entire economic policy of Greece, and that policy means austerity and liberalisation, privatisation and so on," says economist and Popular Unity candidate Kostas Lapavitsas. "That's a dead end for Greece... That's the logic of no growth."

Lapavitsas says a mere extension of its repayment schedule is no longer enough for Greece to prosper. The debt must simply be forgiven - or unilaterally defaulted on if necessary - and cease to loom over the country.

Popular Unity also says private enterprise cannot rebuild the economy with banks in private hands. It would nationalise the banking system and pump liquidity into small and medium-sized businesses.

"Greece has become already a marginal and insignificant country in the monetary union and the EU," says Lapavitsas. "Why? Because it's going nowhere economically. It's a beggar, fundamentally, and it has terms dictated to it. We want to reverse that."

Lapavitsas says Tsipras was simply naive. "The leadership had the wrong strategy," he says, "and the strategy was, 'we've got a good programme, a sensible programme… If we go there and argue coherently, our friends and allies and partners will understand the error of their ways… In the end they will back down.'

"Syriza went there… It came up against a brick wall, basically. In the end it was subjected to blackmail because that's the nature of the monetary union, the power relations there, and it surrendered completely."

In sentimental terms, many Greeks agree. "There was an alternative to austerity, but they didn't negotiate right - nobody did," says Roula Ifanti, a disgruntled civil servant. "We answered to the Germans before and we are still answering to them."

Ignoring the alternative

But it is doubtful that Ifanti or many other Greeks will vote for Popular Unity. Polls suggest it will win only single digits.

While many people say the current austerity plan won't work, a poll by Rass published by the non-partisan newspaper To Paron last month had 81.2 percent of respondents saying Popular Unity's alternative proposal would be impossible to implement.

"There wasn't overwhelming support from people for a period of hardship," says Raptis, who spent years in exile under the seven-year Greek dictatorship in the 1960s and '70s.

"In other times, Greece might have relied upon domestic products. Now we have no manufacturing, or it is bought out by multinationals. We can no longer subsist, and starting the economy from scratch requires a long, long primary period to yield results."

Constitutional lawyer Yiorgos Sotirelis says the election is about a cynical political calculation.

Greek electoral law awards the top party a 50-seat bonus in the legislature, equivalent to 17 percent of the vote. By virtue of that bonus, whoever pips the other at the post, even by a single vote, wins the premiership and command of a coalition. For Syriza and New Democracy, that primacy could prove existential.

"The electoral system falsifies the election result," says Sotirelis, who supports more proportional representation. He puts parties' failure to alter what he describes as "one of the worst election laws this country has ever known" down to "political Machiavellianism".

However, both front-runners are stuck in the high 20s in opinion polls. It is conceivable that whichever wins will only be able to govern through a marriage of convenience with the other.

Such a grand coalition took place once before, between socialists and conservatives. It lasted five months and is remembered by Greeks as a vehicle hijacked by the country's creditors.

Even in the plodding, non-aspirational atmosphere of this election, such a marriage of convenience is unlikely to last long.

A tragedy of errors

This review of The Full Catastrophe by James Angelos was published in The Weekly Standard under the title, "Greece on the Edge". 

When journalist James Angelos embarks on a series of trips to report on the Greek debt crisis, he finds that no-one is to blame for it.

On Zakynthos, for example, three quarters of blindness disability beneficiaries were exposed as frauds. The island’s ophthalmologist had liberally handed out certificates of blindness, countersigned by the prefect.

Angelos approaches the prefect first: “The doctor!” he says. “Only he has responsibility. The doctor puts you down as blind. Not the prefect.” Angelos duly interviews the ophthalmologist: “One of the people who put down a signature was me,” he admits. “Even if there are a thousand signatures, if the prefect doesn’t sign it, no-one gets anything.”

More astonishing than these men’s self-defence is their eventual fate. Although the island is buzzing with talk of the scandal, the prefect runs for its parliamentary seat and wins. The ophthalmologist quietly retires from the national health system with full pension.

Anyone left incredulous at this lack of accountability should enjoy Angelos’ telling of how two treasurers at the municipality of Pangaio, in northern Greece, lured their mayor to a rendezvous and shot him dead with an Uzi submachine gun. The treasurers could not account for €700,000 missing from municipal accounts. At their trial, they claimed that the mayor had forced them to embezzle.

The jury convicted, but embezzlement and murder notwithstanding, the treasurers were able to continue to provide for their families at public expense for nearly four more years. Even after they lost an appeal, the disciplinary process “took really long to start functioning properly,” as one government official put it.

The Full Catastrophe is based on stories Angelos originally covered for The Wall Street Journal. Reworked and expanded, they illuminate the nature of the problems that led Greece to its present pass - opacity, unaccountability and lack of meritocracy in a bloated public sector, and among many who have dealings with it.

Angelos’ prose is beautifully light, and capable of large, yet unobtrusive, shipments of information. He has a Herodotean gift for quoting direct speech. What people say and how they say it are his chief means of observing them, since his interviewees are strangers to him. The cumulative effect is that rather than drawing heavy-handed conclusions, Angelos ripens them in the reader’s mind.

Occasionally Angelos leads readers to judgments without cultural context. In a chapter on the vast influx of Europe-bound war refugees Greece has received in recent years, he quotes dreadful racism in the mouths of Greeks: “If you were an old man and saw fifty blacks walking down the street past your house – and I’m talking very black – wouldn’t you be afraid?” and old man asks him in the border town of Tychero (p192).

It is true that many Greeks say such things, but Angelos’ Western readers are sophisticated enough to understand political correctness. His sources are not.

On the few occasions when Angelos expresses an unabashed conclusion, it is well aimed. After listening to rants against Jews, Muslims and Turks, Angelos says: “The monolithic, ossified brand of Greek nationalism that has long concealed evidence of past pluralism has served to denigrate the concept of Hellenism itself, making it trite, insular and fragile.” (p. 187). This is the manifest anguish of a worldly Greek lamenting attitudes that ultimately imperil his ancestral homeland.

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The Full Catastrophe requires one important caveat: while it does very well recording primary problems that led Greece to over-borrow, it spends almost no time discussing the secondary problems created by creditors’ prescribed therapy.

In 2013 one of those creditors, the International Monetary Fund, acknowledged that it had miscalculated the so-called multiplier effect of austerity. Whereas it had estimated that the economy would shrink by 50 cents for every euro cut from public spending, the lack of competitiveness in the Greek economy made it twice as vulnerable. A report by the Bruegel Group, a Brussels think-tank, reached similar conclusions the following year. Miscalculations such as these emboldened Greek parliament speaker Zoi Konstantopoulou to make the absurd claim that Greece’s entire debt is due to austerity, and that Greece should repay none of it.

As early as 2010, the IMF told the European Union that attempting to finance Greece without a generous, up-front debt reduction was unsustainable. The EU did not want to listen, largely because French and German banks held more than €100bn in Greek debt. A haircut to the Greeks meant another bailout of European banks, two years after governments spent €1.3tr refinancing them.

Some debt reduction came in 2012, when the IMF threatened to pull out of a second institutional loan to Greece, but this was foisted upon the private sector. This meant that 80 percent of the €103bn discount came from Greek banks, Greek pension funds and Greek educational institutions, whose savings at the Bank of Greece had been converted to bonds. Pension funds, which lost €12.8bn, have remained crippled ever since, and must be subsidised with budget money.

Finally, creditors prescribed a €50bn privatisation plan, through which Greece guaranteed bailing-in public assets. But privatising every shred of public infrastructure taxpayers had built, including the power grid, roads, rail, ports, and airports, would not be enough. Vast amounts of public land would have to be bundled, securitised and dumped on the market, severely devaluing the real estate banks held against non-performing mortgages.

Compounding these grave design flaws were Greek errors of execution. The Greek civil service represents over 15 percent of all people in work. It is Greece’s best-paid and most tightly unionised workforce, capable of swinging elections. Governments opted for across-the-board wage cuts rather than layoffs. These had a knock-on effect on the private sector, reducing minimum wage by a fifth, to €3.33 an hour. Unemployment remains at 25 percent despite the wage cut, but the civil service continues to enjoy tenure. The state is a Holy Cow that continues to lie across Greece’s road to recovery.

Crisis-era governments also kowtowed to pensioners and the nearly retired, together more than a quarter of the population. They have suffered benefit cuts of more than 20 percent, but in a country where only 3.5 million out of 11 million people still work, this isn’t enough. Retirement benefits still haven’t come down as much as health spending over five years (over 50 percent) and funding for higher education (three quarters), nor have they allowed a much-touted corporate tax cut from 26 percent to 15 percent – all of which would arguably have helped the economy more than pensioner-driven consumer spending.

In short, Greek governments never claimed ownership of reforms the country needs. It is easier to take orders resentfully and blame creditors for policy failures. For pensioners and the civil service, who together claim more than half the budget, they contemplated only generational change, as though these groups should never be disabused of their expectations, which have become entitlements writ in stone. So just as people benefited unequally in the good times, they have suffered unequally in the bad.

The Greek failure of leadership and the creditors’ foul-ups now mean that years of austerity have brought a balanced budget but little prospect of growth or jobs. Many Greeks now believe that the bailouts weren’t even meant in good faith, but as a means of economic colonialism. They have a sense of their fight for sovereignty and dignity as the vanguard of a global struggle for the soul of capitalism.

It is this resentment and mistrust that brought the leftwing Syriza party, or Radical Left Coalition, to power in January. Syriza promised to focus on growth and end the vicious cycle of austerity and recession by rescheduling Greece’s debt.

Greece currently has 16 years to repay the €204bn principal to the European Commission, the European Central Bank and the International Monetary Fund. The level of wealth extraction from the Greek economy required to achieve this is as high as 4.5 percent of GDP a year. Syriza wants this lowered to between 1.2 and 1.5 percent of GDP. In a debt sustainability analysis the IMF recently agreed, suggesting that Greece be given a 30-year grace period followed by a 40-year repayment period – essentially the rest of the century.

After five months of tortuous negotiations, a third, €86bn loan was agreed on July 13. Greece was offered a €35bn investment fund and a promise to discuss debt sustainability in the autumn. But Syriza got this is in return for going back on its promise to end austerity. Apart from further – needed - cuts to pensions, consumer tax and corporate tax will rise.

This has caused a rift within the party. The crisis has halved the life expectancy of elected governments and moved voters towards extremes. More badly implemented austerity will, sooner or later, give further impetus to that trend. 

How does one reconcile Angelos’ diligence with the lack of cultural context and a more balanced view of the multiple causes of the crisis? One believes Angelos when he claims a “fondness for Greece and many of its people”. The answer could be that Angelos’ perspective remains that of a diaspora Greek struggling to understand the complexes of his ancestral home.

Angelos has a good ear for popular wisdom. Greeks’ relationship with authority – both their own government’s and the European Union’s - has been transformed by this crisis, and not for the better. Surely the most fitting Greek saying for The Full Catastrophe is: Good friends don’t strike good bargains. Good bargains make good friends.