Syriza leader
Alexis Tsipras heads coalition of left and right parties with mandate to take
on country’s paymasters
Helena Smith in Athens ,
Julian Borger in Brussels
and Katie Allen in London
The Guardian, Monday 26 January 2015 / http://www.theguardian.com/world/2015/jan/26/greece-anti-austerity-government-alexis-tsipras
Greek radicals sought on Monday to redraw
the political map of Europe , forming a
coalition government of left and right, united only by their desire to defy the
European financial establishment and shrug off the constraints of austerity.
The coalition, led by 40-year-old Alexis
Tsipras, was expected to dispatch its new finance minister to Brussels
in the next few days to seek a fundamental renegotiation of Greece ’s
economic bailout package, vowing that “the end of humiliation has come”.
Tsipras and his Syriza party have promised to replace the austerity programmes
imposed by Greece ’s
international creditors with policies aimed at helping the third of the
population now living in poverty.
Finance ministers from the eurozone,
meeting at EU headquarters, responded cautiously, acknowledging the new
political realities in Greece
and offering to negotiate, while ruling out the straight debt write-off Tsipras
is demanding.
A spokesman for the German government,
which would have to approve and largely finance any new debt relief, said its
position was unchanged by the Greek election.
The future of the eurozone will be at stake
in the tough negotiations to come.
The radical backlash to austerity embodied
by Syriza’s electoral triumph immediately showed signs of spreading on Monday. Spain is due to
hold elections later this year, and the country’s counterpart to Syriza,
Podemos, is surging in opinion polls. Its leader, Pablo Iglesias, told an ebullient
rally in Valencia :
“Hope is coming, fear is fleeing. Syriza, Podemos, we will win.”
The inauguration of Tsipras, the youngest
prime minister in Greek history, was laden with the symbolism of change. He
broke with tradition by taking a civil oath of office rather than a religious
vow before the nation’s spiritual leader, Archbishop Ieronymos. Tsipras
appeared in an open-necked shirt, having vowed not to wear a tie until he has
negotiated Greece a new deal
in Europe .
His first act as prime minister was to lay
roses at a memorial to 200 Greek communists executed by the Nazis in May 1944.
Analysts said the gesture left little room for interpretation: for a nation so
humiliated after five years of wrenching austerity-driven recession, it was
aimed, squarely, at signalling that it was now ready to stand up to Europe’s
paymaster, Germany.
Syriza’s margin of victory went far beyond
expectations, winning 36% of the vote but falling just two seats short of an
overall majority in parliament. After a brief round of consultations, Tsipras
turned the political order upside down by partnering with the rightwing party
Independent Greeks (known by its Greek acronym Anel), notable for its xenophobia,
antisemitism and homophobia, which won just under 5% of the vote.
Anel’s leader, Panos Kammenos, singled out
Jews for not paying taxes. He has also loudly drawn a historical parallel
between austerity and wartime occupation that Tsipras left unspoken with
Monday’s visit to the war memorial. Kammenos has described Europe
as being governed by “German neo-Nazis”.
Tsipras’s choice of coalition partners came
as an unpleasant surprise to the eurozone’s finance ministers gathering under
wet, leaden skies in Brussels .
One after the other, they insisted the new Greek coalition would face the same
rules and conditions as its predecessors.
The German government, in particular,
emphasised continuity. The finance minister, Wolfgang Schäuble, said the new government
would have to abide by the bailout agreements Greece had signed.
But the finance ministers also made clear
there was room for negotiation. Pierre Moscovici, the European commissioner for
economics and finance, said the EU recognised “the clarity and legitimacy of
the new Greek government” and claimed: “We all want a Greece that stays on its feet, creating jobs and
growth, reducing inequality, and a Greece that repays its debt.”
Jeroen Dijsselbloem, the Dutch president of
the eurogroup, said there was no political support for a write-off of Greek
debt but added that “if necessary” the eurogroup could have another look at the
sustainability of Greece’s debt, after the completion of a review of the
country’s current financial situation.
Dijsselbloem said he had had a 15-minute
phone conversation with the new Greek finance minister, who he did not name but
who had been widely expected to be a Syriza economist, Yanis Varoufakis.
Dijsselbloem said he had expressed willingness
to work together with the coalition, adding that the new Greek minister had
been “very adamant” his country would stay in the eurozone. Although no details
were discussed in the initial conversation, the Dutch eurogroup leader said it
had been a good start.
“What I will not do is negotiate through
the press and I hope they will not either,” Dijsselbloem said. “The problems in
the Greek economy have not been solved overnight with this election. They are
still there.”
Speaking in Athens , Varoufakis sought to downplay
concerns triggered by the party’s choice of coalition partners that the new
government would take an overly aggressive stance in negotiations.
Varoufakis said the government would seek
to persuade its eurozone partners to allow the country to reduce its debt
burden by linking repayments to growth. He also dismissed suggestions that
Syriza would threaten a “Grexit”, a Greek departure from the eurozone. “We, who
happen to be in the eurozone, must be very careful not to toy with loose and
fast talk about Grexit or fragmentation,” he told BBC radio.
“Grexit is not on the cards; we are not
going to Brussels and to Frankfurt and to Berlin in
confrontational style. There is plenty of room for mutual gains and benefits.”
Market reaction to the election result was
muted. Syriza’s decisive victory initially caused the euro, already under
pressure from the European Central Bank’s latest stimulus package, fall to an
11-year low against the dollar. But it recovered during later trading and, by
the time Tsipras was sworn, in the euro was up on the day against the dollar at
about $1.124.
“The Greek election results were no
surprise and were largely priced into markets,” said Jasper Lawler, market
analyst at the broker CMC Markets UK.
“The true impact of the victory of Syriza
will be hard to ascertain until there is more news on the renegotiation of the
bailout terms between Greece
and the troika.”
Mujtaba Rahman, an analyst at Eurasia Group
political risk consultants, said that with his partnership with Anel rather
than the moderate party Potami (the River), Tsipras was “signalling he is
prioritising internal over external constraints. He has formed a coalition he
can sell to the hard left in Syriza even if it makes it tougher to negotiate a
new deal on Greek debt.”
Rahman argued the room for manoeuvre for
the German chancellor, Angela Merkel, had narrowed as a result of last week’s
quantitative easing decision by Mario Draghi, the head of the European Central
Bank, pumping more than €1tn into financial markets.
That decision was taken despite opposition
from Merkel and German institutions, who saw it as a financial bailout to
free-spending eurozone governments. “Quantitative easing is a big problem for
Merkel, as it has mobilised constituencies which opposed it in a vocal way,”
Rahman said. As a result, the room for negotiation has narrowed from both
sides.
“The probability of Greek exit from the
eurozone has to increase,” he concluded, but he still believes it is more
likely that an 11th-hour compromise can be found in the remaining months before
Greece has to be repay a nearly €7bn loan to the European Central Bank in June.
That is the really hard deadline that the negotiators are facing.
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