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Η Οδύσσεια προς το κέντρο

Young, enthusiastic and undoubtedly charismatic, it is hard to pin down Alexis Tsipras.

Is he a great political talent, or a shambolic gambler? A genuine, honest man of the people, or an untrustworthy interlocutor and ultimately traitor to the cause? The worst thing that could have happened to Greece, or its only hope going forward?

There are clearly many sides to Mr. Tsipras, the former communist who took the helm of Greece in January and almost lead it over the precipice and into a Grexit before turning back at the last minute and making a deal with the country’s lenders.

The Greek prime minister has had a grueling first six months in office. After pushing the country’s creditors to their limits, he ended up capitulating completely to their demands on July 13 at the fraught E.U. summit in order to secure a three-year bailout worth €86 billion.

Yet, rather than go home to Greece with his tail between his legs, he has been greeted by many of his compatriots as a returning warrior, bruised and bloodied, but surviving to fight another day, just like Greece.

Now he faces two huge tasks. He needs to conclude a final bailout deal with his creditors, who have descended upon Athens this week for talks, in order to access the loans the country desperately needs. And he has to control his rebellious radical-left Syriza party, either by crushing or getting rid of the dissenters so he can go forward with the implementation of the bailout conditions.

We are telling the Greek people, loud and clear and with no remorse, that this is the deal we managed to bring to them.


Alexis Tsipras


Greek Prime Minister

With almost 40 Syriza lawmakers refusing to back him in parliament, he is arguing that they cannot both be in government and not back its policies.

On Thursday, addressing the party’s 200-member central committee, he called for an emergency party conference in September to decide strategy.

Mr. Tsipras wants to sort out the problems within Syriza after the bailout deal is done. Greece needs an agreement soon, before a looming €3.4 billion debt repayment to the ECB on August 20.

The conference next month would allow him to bring in new members and possibly defeat the hard-left Left Platform.

Left Platform leader Panagiotis Lafazanis, who Mr. Tsipras fired as energy minister after he failed to back the government over the bailout agreement, said that the deal betrayed the party’s principles.

“Syriza is at risk of humiliation because of the bailout transformation,” he told the Syriza meeting on Thursday. “In this country there is no democracy … but the dictatorship of the euro.”

The prime minister lashed out at those like Mr. Lafazanis, who are now pushing for a Grexit rather than accept the austerity linked to a third bailout in five years.

“We are telling the Greek people, loud and clear and with no remorse, that this is the deal we managed to bring to them and if there is someone who thinks that they could have achieved a better deal, let them come out and say that,” Mr. Tsipras said.

The Left Platform has an oversized presence on the central committee, accounting for around 40 percent of its members, but that is not reflected in the wider party, really an umbrella group made up of several different left-wing groups.

Outpacing Greece-01

 

 

For now Mr. Tsipras can rely on the opposition parties to get through any bailout program through parliament. However, he argues that he cannot continue to govern with a significant part of his party opposing the deal.

New elections are widely predicted for some time in the autumn. Mr. Tsipras would then be able to clear out the hard left, even if that means facing his former comrades as electoral opponents.

Even without the hard left, Syriza could still do very well. The irony is that despite reneging on the promises, Mr. Tsipras is more popular than ever.

His personal approval rating is over 50 percent and a poll carried out by Metron Analysis in late July predicted Syriza would win 41.2 percent of the vote in an election.

The 41-year-old prime minister seems to have a knack for saying what the Greek people want to hear, as he did in January when the party was elected.

“He has been promising what the Greeks wanted, that’s how he came to power,” says Megan Greene, chief economist with Maverick Intelligence in London. “What he was promising and what the Greeks want, is to have their cake and eat it too. They want no more austerity but they want to stay in the euro zone, but these two things are contradictory.”

Ms. Greene agrees that the Syriza leader is stronger now than ever in terms of domestic politics. “But he dragged an entire nation through the gutter to get there.”

Capital controls introduced the week before the July 5 referendum have cost the country dearly. Economic activity has stalled, as Greeks have been confined to taking first only €60 a day, now €420 a week out of their accounts.

In general the six months of uncertainty have been hugely costly. By the end of 2014, the Greek economy, which had contracted by a quarter over five years of austerity was recovering.  Yet, Standard and Poor’s now predicts that the Greek economy will contract by up to 3 percent in 2015.

For Yannis Koutsomitis, a euro zone analyst based in Athens, “if we just look at the numbers, Tspiras has failed miserably. He could have delivered more favorable terms for an agreement months before July.”

“But on the other hand we need to realize Greek public opinion wasn’t ready to accept a compromise if there was not a real battle,” he said. “Greeks wanted a battle.”

And Mr. Tsipras and his finance minister, Yanis Varoufakis, certainly provided one. Mr. Varoufakis spent months antagonizing and lecturing his counterparts in Europe. It also seemed that Greece was betting on market panic at the prospect of a Grexit, a panic that never happened.

The Greek side was also widely viewed as incompetent, with Mr. Tsipras frequently agreeing to measures and then changing his mind after consulting with advisors.

The pair particularly infuriated their European partners by calling the July 5 referendum on the creditors’ offer.

Even though Syriza, which called for a no vote, won that referendum by 61 percent, Mr. Tsipras decided to reach a humiliating deal with his euro zone counterparts, which provoked Mr. Varoufakis to step down.

“The Greeks were sad that the battle was lost, but they wanted to fight and they blamed the previous government that they had compromised without a battle,” said Mr. Koutsomitis.

“I don’t know if they really comprehend the damage that has been inflicted on the Greek economy,” he added.

Most Greeks think that Mr. Tsipras “did his best to renegotiate the deal and it was basically beyond his power,” says Blanka Koleníková, senior analyst with IHS Global in London.

“The people appreciate that,” she told Handelsblatt Global Edition.

“I don’t think this will damage Tsipras’ popularity,” said Theodore Pelgadis, professor of economics at the University of Piraeus, Athens. “Tsipras has the advantage that people hear what he says. This is great political capital.”

And, although the current political instability is not ideal just at a time when the bailout is being negotiated, the creditors will probably realize that even an election is not necessarily going to undermine the bailout program.

“None of the parties that are likely to get any significant number of seats in parliament are against it,” says Ms. Koleníková of IHS.

If Syriza doesn’t get a majority in parliament it could form a coalition with other pro-European parties, such as the new center-left To Potami party.

The fact that the young radical left leader is now preparing to rid himself of his hard left, in order to possibly go into government with the center shows how much of a political journey he has made.

Depending on one’s perspective this is either a wake up to reality, or a terrible abandonment of his values.

“From a radical left point of view it is a disaster,” said Dimitris P. Sotiropoulos, a lecturer in finance at the Open University Business School in the U.K., and a member of Syriza. “Because we have this grotesque situation where a left-wing government has agreed to implement a program of austerity.”

However, Mr. Pelagidis, who is also a fellow with the Brookings Institution, predicts that if the Greek government does implement the bailout terms, then conditions could eventually be eased.

“The Europeans will try to give Tsipras something because they need him,” he said, pointing out that he is a left-leaning leader prepared to carry out reforms. “I think they could invest in him. They will give him frontloaded structural funds from the European programs and some kind of reprofiling of debt, which does not need to be a haircut.”

Ms. Greene, however, is pessimistic that a Tsipras-led government can ever bring itself to carry out far-reaching reforms. “I think there is very little chance that the bailout program will be implemented by this government or any Syriza-led government.”

The fact that Mr. Tsipras has repeatedly said he does not believe in the terms imposed by the creditors undermines any credibility when he says he will now implement the reforms, she told Handelsblatt Global Edition.

I think there is very little chance that the bailout program will be implemented by this government or any Syriza-led government.


Megan Greene


Chief Economist, Maverick Intelligence

However, Ms. Koleníková, thinks there’s a chance that Mr. Tsipras will actually carry them out. “I am more optimistic about Greece implementing the promises under Syriza than if New Democracy or Pasok were in power,” referring to the center-right and center-left parties that governed for decades.

Syriza is untainted by corruption or cronyism, and a relatively new political force, she argues, and furthermore “recognizes that Greece does need to reform the system.”

Mr. Sotiropoulos, who is not a member of the Left Platform and believes Greece should stay in the euro zone, also thinks that Mr. Tsipras will introduce the reforms.

He says the bailout program will be a “new failure.”

“The targets will never be met and the economic and political effects on the Greek society will be very devastating,” he argues.

As a result, the “huge political capital” that Mr. Tsipras’ currently enjoys will soon start to fade, he predicts.

“It will depend on the economy,” says Ms. Koleníková.  “If people see more light at the end of the tunnel, they will be a bit more optimistic and forgiving of the government.”

If Mr. Tsipras can maintain what his image of a genuine guy, trying to do his best, he could retain his popularity for a long time.

The only thing that could undermine him would be the arrival of another “charismatic leader who offers them a new vision,” she said. “But I don’t see that happening.”

 

 

Siobhán Dowling covers European politics for Handelsblatt Global Edition. To contact the author: dowling@handelsblatt.com

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