Tsipras’s main campaign promise was that the austerity measures imposed by the troika has been excessive and that Greek debt, which now stands at a staggering 175 per cent of the GDP, is unsustainable.
But if Tsipras does not get what he wants, he may choose to walk out of the eurozone and the European Union, leading to bank collapses, steep income reductions, inflation and severe unemployment in Greece.
One of the first things that Alexis Tsipras did after assuming office as the new prime minister of Greece was to visit a memorial site where Nazi soldiers executed more than 200 Greeks who were suspected to have led an ambush that killed a German officer. For most Greeks, there is no love lost for Germany. There are experts who say that as many as 3,00,000 Greeks starved to death during the Nazi occupation. Tsipras, 40, rode to power on an anti-austerity wave against the bitter €240-billion bailout package offered by a troika of the European Commission, the European Central Bank and the International Monetary Fund. Germany, too, played a crucial role in the deal as the financial powerhouse of the continent. The anger against Germany is palpable on the streets of Athens where portraits of German Chancellor Angela Merkel dressed as a Nazi are not uncommon. “We are going to demand debt reduction and the money Germany owes us from World War II, including reparations,” Tsipras said earlier in January.
Tsipras became Greece’s youngest prime minister after his party Syriza won 149 seats in the 300-member parliament in the national elections held on January 25. Syriza was formed in 2004 as a coalition of radical groups, including environmental fundamentalists, socialists, Maoists, Trotskyists and communists. Tsipras brought a new leadership style to the party, never letting it slip into dogmatism.
Born to a civil engineer father, Tsipras grew up learning English on his own and reading tomes on Marxism. As a young student, he got noticed across Greece in 1990 when he organised a sit-in at his school and told the media that “we want the right to judge for ourselves whether to skip classes or not”. A huge fan of Che Guevara, he has named the youngest of his two sons Orpheus Ernesto after the Argentinian revolutionary. Charismatic, articulate and telegenic, he ran an effective campaign, harnessing the discontent among the Greek voters and their opposition to strict austerity measures.
Greece has had six prime ministers in the last 10 years and none of them lived up to the promise of ending the economic crisis. The crisis only grew worse under their watch. As Greece lurched towards a payment default, massive unemployment and civil unrest, the troika stepped in with a €240-billion bailout package. But the price Greece had to pay for that was painfully steep, which included moratoriums on pensions and early retirements, tax hikes and salary cuts. However, even after nearly five years of austerity, the unemployment rate remains high at 27 per cent, industrial production has gone down by 30 per cent and three million people are below the poverty line. “We are coming in to radically change the way that policies and administration are conducted in this country,” said Tsipras while campaigning.
Central bankers and political leaders are now watching every move by Tsipras to see whether the populist leader will walk the talk. Tsipras’s main campaign promise was that the austerity measures imposed by the troika has been excessive and that Greek debt, which now stands at a staggering 175 per cent of the GDP, is unsustainable. To resolve the crisis, he wanted a debt forgiveness programme and suggested that he was looking at abandoning the structural reforms ordered by the troika by giving up privatisation, rehiring government workers, restoring pensions, lowering taxes and implementing a big rise in the minimum wages. On January 28, Tsipras made it clear that he would go ahead with his anti-austerity drive by announcing a roll-back on privatisation plans agreed under the bailout deal. He also demanded a re-negotiation of the Greek debt. The move saw the stocks of Greek banks dropping by 26 per cent on a single day. Germany and France have responded that they were against re-negotiation. France, however, said it was ready to open talks about making the debt burden more sustainable. Tsipras is likely to meet French President Francois Hollande before a European Union summit scheduled for February 12. Germany’s minister for economic affairs Sigmar Gabriel said Greece should have discussed the rolling back of privatisation before making the announcement. “Citizens of other euro states have a right to see that the deals linked to their acts of solidarity are upheld,” said Gabriel. He warned Greece against quitting the euro but said the decision ultimately rested with the new government.
But if Tsipras does not get what he wants, he may choose to walk out of the eurozone and the European Union, leading to bank collapses, steep income reductions, inflation and severe unemployment in Greece. It is also likely to cause a rethink among south European countries like Italy, Portugal and Spain about a similar course, threatening the future of the EU. On the other hand, even if Tsipras manages to get a debt waiver, populist political parties like the Podemos in Spain and the Five Star in Italy are likely to grow in strength, forcing governments to cede to their demands. The Podemos is already on top of the popularity charts, while Tsipras himself has predicted that the left-wing Sinn Fein would win next year’s elections in Ireland. While such a drastic course of action does not appear imminent at the moment, there are observers who feel that opting to exit from the eurozone may actually benefit Greece, especially with the luxury of having a lower rate of currency exchange. Tsipras, meanwhile, has signalled that he plans to chart an independent course not just in economic matters, but also foreign affairs. The first foreign official to meet Tsipras after he took charge was the Russian ambassador. Following the visit, Greece announced that it did not support the move by the EU to impose further sanctions against Russia. The position was reiterated by energy minister Panagiotis Lafazanis on January 28. Ahead of the EU foreign ministers meeting in Brussels on January 29 to discuss more sanctions against Russia, the Greek position caused heartburn in several European capitals. At the meeting, however, Greece toned down its opposition and did not veto the EU decision to extend the existing sanctions for six more months. “The Greeks deleted a few lines (of the resolution), but its no big deal,” said Lithuanian foreign minister Linas A. Linkevicius.
Back home, the Greek Orthodox church, too, is finding it hard to adapt to the change in government. As soon as his victory became certain, Tsipras, a self-avowed atheist, informed the archbishop of Athens that his services were not required for the oath-taking ceremony. Usually, the clergy dominated such events and the bible and the cross were ubiquitous by their presence. That age-old tradition was broken last week. Greece, it appears, is entering uncharted waters under the leadership of Tsipras.