Time Running Out for Tsipras and Greece

Alexis Tsipras

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February 17, 2016 17:29 EDT

Alexis Tsipras must fully commit to Greece’s bailout agreement in both letter and spirit.

The popularity of Greece’s radical left-wing Syriza party is on the decline. In January, polls showed that support for Syriza—which struck a power-sharing agreement with the right-wing Independent Greeks (ANEL) party after romping to victory in January 2015 on an anti-austerity ticket—had fallen by almost 50% since it was re-elected in September.

The same poll showed the center-right New Democracy party had opened up a significant lead over Syriza, suggesting a shift in Greek politics after 12 months of broken promises and non-delivery.

Ups and Downs for Tsipras

It seems that Prime Minister Alexis Tsipras, the charismatic young leader who swept the party to power last year, is finally paying the price for ditching the opposition to severe cuts that took him into government—which he swiftly jettisoned when it became obvious he had no option but to play ball with the Greece’s creditors. Not only did Tsipras fail to save the Greek people from austerity, but he agreed to more of it, while failing to introduce the policies required to reshape the country’s stumbling economy.

For a while, Tsipras managed to hold onto the hearts and minds of the Greek people after performing one of the most dramatic about-faces in recent European political history. In July 2015, shortly after he caved in to Greece’s lenders, Tsipras enjoyed an impressive approval rating of 60%. Analysts suggested to The Huffington Post that voters might have been giving Syriza credit for at least attempting to secure more favorable bailout terms for the country.

Now, though, it appears the party’s perceived ideological betrayal and muddled populism have alienated the Greek electorate. To many, it has become clear that Tsipras’ half-willingness to work with European Union (EU) creditors is delaying the radical reform needed to fix the country’s woefully dysfunctional monetary system. The Greeks’ patience with Tsipras—and Syriza—has finally all but worn thin.

Greece is currently attempting to persuade creditors that it is on course to reform state pensions, meet fiscal targets, and deal with bad loans in a bid to secure further debt relief from the country’s third bailout. But the EU and the International Monetary Fund have questioned whether the Syriza-led government is doing enough to maintain an adequate primary budget surplus.

“There are disagreements, which we will discuss when we return. What is important … is that they agree on the architecture of what we are proposing,” Greek Finance Minister Euclid Tsakalotos optimistically told lawmakers before a break in negotiations on February 8.

European Union

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“We must convince them … how we will reach the 3.5% of GDP primary budget surplus year by year. The pension and tax reforms will contribute to this in 2018,” he added.

Eurozone officials have told Market News International that negotiations could take months if Greece fails to comply with the conditions of the bailout, during which time the Greek people and the country’s stock market will face even more uncertainty. Further evidence, if any were needed, of Syriza’s apparent inability to deliver the pace of reform required to transform Greece’s fortunes.

Persuading the Public

As well as struggling to convince creditors it is managing to stick to the terms of the country’s bailout agreement, the Syriza-led government is also having problems persuading the Greek public that its program of austerity and structural reform will pay off in the long-term, if at all.

At the beginning of February, Greece was brought to a virtual standstill as thousands of workers went on strike, taking to the streets to protest over cuts to pensions that unions claim will only serve to push many more ordinary Greeks into poverty—in a country where more than a quarter of the working-age population is already unemployed.

Separately, reports suggest that Greek ship owners are considering bailing out of the country after being told they will be hit by additional taxes to help dig the government out of its seemingly never-ending debt quagmire. All this considered, alongside government plans to bring all Greek shipyards under one public body, demonstrates succinctly how Tsipras is failing to keep both the country’s creditors and the Greek people happy. If anything, the shipping sector needs foreign investment to get back on track and strengthen its status as Greece’s second biggest industry after tourism.

Having dramatically abandoned the radical ideals that brought it to power last year, Syriza now has no choice but to comply fully with both the letter and spirit of Greece’s latest bailout agreement. Tinkering around the edges with secondary populist issues will only serve to spook already worried creditors and investors, and do nothing for the party’s poor prospects of holding onto power.

Time to Commit

In all fairness, after former Energy Minister Panagiotis Lafazanis quit, Tsipras’ party has wormed its way back to the political spectrum. However, the damning populist influence of minority partner ANEL has, on many occasions, threatened to scuttle the bailout agreement.

Defense Minister Panos Kammenos, the ANEL party’s leader, is staunchly opposed to privatizations, and he famously quipped during the bailout negotiations that, “If we don’t get what we want from negotiations, we’ll do a Kougi,” referring to a fortress where Greek soldiers blew themselves up together with Ottoman troops in 1803 in order to avoid surrender.

With a wafer-thin majority of only three in Greece’s 300-seat parliament, plummeting poll ratings and a growing refugee crisis to deal with, Tsipras must now wholeheartedly commit to the terms imposed on Greece by its creditors and seek to speed up the effective reform required to show that public austerity is paying off.

To do otherwise will only serve to quicken the demise Syriza, and condemn the Greek people to years more of the suffering the party once so idealistically promised to fight against.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

Photo Credit: Marco Aprile / Symbiot /

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