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No Tie, No Support


Greek Prime Minister Alexis Tsipras started out as the far-left David taking on the EU-IMF Goliath. Now he is widely seen as Berlin’s poodle, and his economic policies have deepened the country’s crisis.

Greek Prime Minister Alexis Tsipras stands next to Greek Presidential Guards as he attends a swearing-in ceremony of the newly appointed members of his government at the Presidential Palace in Athens, Greece November 5, 2016. REUTERS/Alkis Konstantinidis TPX IMAGES OF THE DAY - RTX2S0O6

© REUTERS/Alkis Konstantinidis

When Alexis Tsipras burst into the spotlight in early 2015, he was seen by most in Europe as too young, too radical, and too left. At just 40, he was fresh-faced and irreverent, and already head of Greece’s Syriza party – a motley crew of radical left-wing groups, from ecologists to Trotskyists.

Across Europe, the prospect of a Tsipras win raised the specter of chaos in Athens and a Grexit, with a domino effect in Spain, Portugal, and Italy looming on the horizon. An earlier article in Germany’s Der Spiegel had included Tsipras in a list of the twenty most dangerous politicians for Europe’s unity, along with France’s far-right Marine Le Pen and Italy’s flamboyant Silvio Berlusconi.

But most Greek voters didn’t agree. They saw Tsipras as the only hope to bring Greece out of its deep misery. He vowed to end austerity, stop further budget cuts, and lift the economy back on its feet. So they gave Tsipras the mandate he needed and Syriza swept to power in January 2015.

Nearly two years later, Tsipras hasn’t delivered on those promises. Instead, he and his government (including his coalition partners, the far-right Independent Greeks, or ANEL) are considered German Chancellor Angela Merkel’s darlings. It’s certainly been an abrupt about-face from the prime minister’s “Go back, Mrs. Merkel” speech on the campaign path to his cozy ties with Berlin today.

A Disappointing Record

Once in office, Tsipras compromised with Greece’s lenders and expanded upon the previous governments’ austerity policies. He privatized public assets, slashed pensions for the sixteenth time, and lifted a state-imposed ban on foreclosing family homes.

But those measures haven’t seemed to have much impact on the ailing economy. Unemployment is gradually falling, but almost a quarter of the population is still out of work. Highly-skilled young Greeks are migrating to Western Europe to find jobs, while businesses are either shutting down or fleeing to nearby Balkan countries with more attractive tax rates. State debt is at a record 179 percent of Greece’s GDP.

Tsipras never managed to win consensus for his austerity plans either. Greeks haven’t taken to the streets en masse, but disillusionment with the government is growing and Tsipras’ popularity plummeting.

According to an October poll by the Athens-based survey group Greek Public Issue, only 14 percent of Greeks would vote for the current union government. Less than a quarter of voters see Tsipras as the best possible prime minister among the country’s leading lawmakers.

Tsipras was dealt yet another blow in late October when Greece’s highest court struck down a new television licensing law. The government had championed the legislation as a way to crack down on Greek oligarchs owning television stations and broadcasting without licenses for nearly thirty years. Syriza claimed these media moguls were influencing elections. But critics argued the law was merely Syriza’s attempt to create its own group of media moguls.

And the prime minister’s cabinet reshuffle in early November has come under heavy criticism as well – his newly appointed ministers will only have three weeks to negotiate with the country’s lenders on important issues like privatizations, a new minimum wage, and collective redundancies.

Now, pressure is mounting and the prospect of early elections or a reshuffling of the government is looking ever more likely. Tsipras, however, continues to bat down the possibility. “We’ll have elections in autumn 2019. The people will judge [us] then, freely and unaffected,” he told a group of European reporters last month.

Voters seem to have a different opinion. An overwhelming majority – 85 percent in Public Issue’s latest poll – doesn’t agree with the government’s economic policies and 45 percent believe that neither of the two largest parties can lead the country out of crisis.

An Uphill Battle

From any angle, Tsipras is facing an uphill battle and it’s unclear if he’ll be able to turn around his fortunes. What’s more, a new round of taxes will go into effect in 2017. Everything from landlines and cellphones to heating oil will carry an additional tax. The effect on industry has already been startling. Tens of thousands of small and medium-sized businesses either shut down or moved to Bulgaria, where the corporate tax rate is a stable ten percent. That is a far cry from the sixty percent in taxes and social security contributions they face in Greece.

The country’s international lenders haven’t lightened the load, refusing to even discuss a debt write-off. The IMF has now acknowledged it made mistakes in its handling of the eurozone crisis, particularly in pushing Greece to follow certain austerity policies. According to an IMF report published last summer, the fund says it should have recognized the Greek economy’s deep dysfunction and pushed for debt restructuring far earlier.

In fact, Greece had been building an inflated economy on shaky foundations over four decades. The two ruling parties, PASOK and New Democracy, allowed a system of patronage to flourish in public and private sectors. Politicians promised jobs to their constituents in exchange for votes. Bribes were the norm for doing business with the government, and they often came from abroad. German companies were also involved.

Meanwhile, Athens kept borrowing to fund its growth while globalization was crippling the country’s manufacturing sector. When the housing bubble burst in the United States in 2008, it was as if a tsunami swept over Greece, drowning the country in its own debt. The sociopolitical landscape in Greece changed swiftly. Systematic cronyism fell apart: As part of the EU-IMF bailout agreement, hiring in the public sector was frozen.

A Blessing in Disguise?

With hindsight, Syriza might have been a blessing in disguise to Greece’s pro-austerity camp. The party can be credited with implementing tough austerity measures that previous governments couldn’t manage – the very same measures that spurred hundreds of thousands of people to take to the streets in 2010 and continue protesting all the way through 2015.
During those demonstrations, Syriza ended up absorbing most of Greece’s union leaders, grassroots movements, and historic left-wing figures. Along came dozens of former PASOK members who were scrambling to save their political future.

As prime minister, Tsipras has managed to tame his party and close ranks. He swept out Syriza’s far-left elements and kept only those that were true to him and his close circle of influence. Those who were forced out now hold Tsipras responsible for ruining the Greek left’s only real chance to steer the country’s politics. Historically, Greece’s left has only had limited political influence, if any.
Meanwhile, Tsipras and the party have undergone significant change, as was evident at the Syriza party convention last October. Athens was covered in banners proudly featuring Tsipras’ face. Some 2800 loyal party members showed up at the convention and clapped throughout the prime minister’s speech, backing all his policies with almost religious fervor.

Praying for an Obama Miracle

With Greek debt ballooning, Tsipras is desperately looking for EU partners to ensure his political survival. But he still hasn’t managed to build a coalition with Italy, Spain, and Portugal to oppose German-driven austerity in Europe.

So the government is now banking on US President Barack Obama’s visit in mid-November to help convince Greece’s lenders to write off some of the country’s colossal debt. Greek media are buzzing with hopes of a miracle from Obama – he has been the only Western leader speaking out against austerity. The US president will push the IMF and EU leaders to ease Greece’s debt load, they daydream. That would certainly help the prime minister pick up some points with his electorate.

Still, it might be too little too late for Tsipras. In a press conference back in 2015, he declared he would only start putting on a tie if he managed to come to an agreement with the country’s creditors and secure a debt write-off. He has stuck to the promise and never worn a tie.

But even if he does succeed in relieving Greece’s debt burden, he should be careful not to get too comfortable in his new clothes. Because the tie may come to symbolize just how much he has compromised – and that could spell political doom.