United by austerity

By George Candon, Orestis Kalliantzidis and Constantine Levoyannis

The dust had barGreek EU flagsely settled on the outcome of the much-anticipated Greek general election which saw Syriza fall just two tantalizing seats short of an outright majority*, when hot on the heals comes the news that the hard-left party has jumped into bed with the populist rightwing Independence Party, forming a government after just one hour of coalition negotiations. A reminder, if one were needed, of what strange bedfellows politics makes.

The alacrity with which the negotiations were concluded speaks volumes about both parties’ major priority and common primary focus: to end what Tsipras has termed “the vicious cycle of austerity”. Thereafter, positions differ wildly, from issues such as immigration and foreign policy, to national security, the separation of church and state and gay marriage. Outgoing prime minister Antonis Samaras’s analysis that the elections have “restored Greece’s international credibility” may be a little premature: a government united only in killing austerity could easily fall apart over their deep ideological differences. But the speed of an agreement seems to suggest a common accord to ignore the more contentious policy areas. Austerity is the only show in town.

While there has been much hand wringing and declarations of doom in the run up to the vote should Syzria win, Tsipras has been careful to make conciliatory-sounding noises to calm the nerves of his European brethren. “There will be no mutually destructive clash”, he says, focusing vaguely on the “great opportunity for a new beginning”. Moreover, informal pre-election contacts between European mandarins and Tsipras caused sighs of palpable relief of how reasonable Tsipras has been. And the man widely tipped to be the new finance minister Yanis Varoufakis himself on Monday insisted that a Grexit was not “on the cards” – politically astute, as polls put Greek support for ongoing EU membership at over 75%. However in his acceptance speech Tsipras also stated that the election “renders the troika a thing of the past for our common European framework”, clearly drawing his battle lines.

The troika big beasts have in turn also been eager to set out the rules of engagement for the forthcoming game. Germany’s Commissioner Gunther Oettinger spoke against a debt-write-off, saying it would set a bad example for other countries in the grip of austerity. But he did not exclude prolonging the maturity of bonds and other measures which would ease repayment of Greek debt. IMF Director General Christine Lagarde echoed this position, saying that negotiations over the last wave of reforms due by Greece and possible easing of debt repayments should begin at once. But she also underlined that eurozone rules had to be respected and warned against giving any one country special privileges (which of course would be quickly demanded by other austerity-bound administrations in Dublin, Lisbon and Madrid). “Europe will continue to support Greece, but it is expected that Athens will stick to the promises made to its partners”, was Juncker’s gambit.

There will be plenty more posturing, but the clear feeling is that there is no appetite for a head-on confrontation from either quarter. Given the noises from all sides, a compromise debt-relief-for-structural-reforms deal seems more than likely.

Meanwhile radical and anti-austerity groups across Europe such as Spain’s Podemos and Ireland’s Sinn Féin have taken much succour from Syriza’s routing of the old guard. At the same time the old guard itself is jumping on the anti-austerity bandwagon: France’s beleaguered Socialist president François Hollande congratulated Tsipras, recalling “the friendship that unites France and Greece” and calling for continued cooperation “to support the growth and stability of the eurozone”.

The 2015 Greek elections have marked a significant turning point in the country’s post-junta democratic history. For the first time since 1974 one of the traditional dominant parties will not govern the country. Trivia buffs will also know that this is the first parliament in 92 years in which a Papandreou will not sit. And quid New Democracy? Will it become the internal spokesperson for the troika? Will it opportunistically try to cleave open the ideological differences between the governing parties to engender a collapse and fresh elections in six months’ time? Or will it responsibly poke holes at the government, putting the country’s long-term political and financial stability before short-term opportunism?

Watch this space.

*including the 50-seat bonus gifted to the party winning the largest number of seats
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