Syriza, Greece and Europe

It has been a hot debate in the corridors of power in Brussels, Berlin, Paris, London and the whole European Union. Will Greece remain in or get out of the Eurozone? Recent events in Greece have brought this improbable question to the forefront of the political discussion.


In 2011 Greece was in danger of defaulting, the country absolutely had no money to pay its creditors. The yields on the public debts reached very dangerous levels and the country looked like it was about to suffer a catastrophic economic destruction. Now, Greece is a small country and in the scheme of things the European economy would no suffer much if the country was to quietly default and declare bankruptcy. But, alas Greece was part of the Eurozone, EU countries that use the Euro as currency, and its default would devalue the shared currency and the entire economic system of  the Eurozone and the EU would have collapsed like a house of cards and started an economic depression world wide that would have been worse than the Great Depression.

So all the great powers of the EU, Germany, France, and the United Kingdom with the EU, the European Central Bank and the IMF decided that Greece would be bailed out. The plan was to give the Greek government 240 billion Euros in three tranches but with conditions attached, The first condition which remained acrimonious was the resignation of the ruling prime minister George Papandreou of the Panhellenic Social Movement (PASOK) who was replaced by Lucas Papademons, a technocrat. It is acrimonious in the way that it looked, and is, like leaders of foreign nation forced the resignation of an elected official and replaced him with an un-elected technocrat. It was not democracy, and the Greeks never forgot it. The other conditions where than the Greek governement had to meet the EU and IMF set reforms to be able to receive the rest of the money. Austerity was imposed on the Greeks from the EU-IMF troika, public jobs were cut and it led to an outcry and euroskepticism in Greek society.

It might have looked bad from the point of view of the Greeks, since it seemed that the troika was basically telling them that their democracy and will did not matter. But for the rest of Europe, it did look just, especially in Germany. The money for the bailout was not going to come out of thin air, it was taken from the savings of other more prosperous country, with Germany bearing the brunt of it. The reason that Greece was is such bad shape economically was that they had taken advantage of the fact that they had a currency that was enhanced by the fact that they shared it with world powers and they took advantage of the low interest rate and borrowed more than they could affords until it all came crashing down with the crisis in 2007. So giving them hundreds of billions in Euros with no conditions seemed foolish and and would have been toxic for the European political class. So austerity was imposed and the Greek economy didn't collapse.

Antonis Samaras

In Greece however, new elections were held and the well performing technocratic government dismissed. Antonis Samaras of the center right New Democracy party became prime minister and formed a coalition with the previous ruling party, PASOK. They all agreed to continue meeting the standards set by the EU and the IMF. However, the Greek population had grown tired and from the fringes of the political world two parties emerged. Syriza from the extreme left and Golden Dawn from the Nazi influenced very extreme right. Golden Dawn is for another time, since it is Syriza that we are concerning ourselves with.

In the elections of 2012 Syriza a party that no one had taken seriously before began attracting voters because of their unconventional platform, They argued that Greece should refuse to pay the debts that they owed due to the greed of the creditors. Faced with the fact that many European leaders were threatening with the exit from the Eurozone if Greece was willing to default, Syriza began to welcome and even taut that aspect. In their minds the EU would not risk Greece leaving the Eurozone as it would create an unsavory precedent and would still  cause the devaluation of the Euro harming the big economies of France and Germany. The European leaders led by chancellor Merkel, expressed their wish for Greece to remain in the Euro and to meet the bailout terms and sort of led a campaign to scare the Greeks about a life with no Euro. Still, Syriza became the third party of Greece and an important power player in Greek politics. Which leads us to the recent events.

The outgoing Greek president, Karolos Papoulias term has reached its limits and the parliament had to elect a new president. The prime minister, Samaras, nominated a former minister, Starvos Dimas for the role. The Greek parliament failed, three times to reach the required amount of votes. It was in part due to the dissatisfaction with the current Greek governing coalition and to the manipulation of Alexis Tsipras and his party, Syriza. The failure to elect a president, forces a general election in the following three weeks according to the Greek constitution. As of now the general election is set for the 25th of January and the parliament will be dissolved in a matter of days.

Alexis Tsipras

Polls after polls have shown that Syriza is in the lead and that that the next Greek government might refuse to continue the imposed austerity and if necessary leave the Eurozone and return to the drachma as a currency. The Greek general election has unleashed a panic in European circles of power, because the precedent is dangerous. The Germans especially have been very outspoken in their dislike of such thinking and the German chancellor has expressed her thoughts in strong manner. Most European leaders have stated that while Greece has the right to chose its government, they ought to follow the conditions imposed by the IMF and the EU due to the fact that they used the credibility of the Euro to borrow and spend beyond their means and have already taken bail money from the savings of other European nations.

Such words from the Europeans leaders are producing the opposite of their desired effect which is to guide the Greek voice at the polls to insure a New Democracy or PASOK victory. Syriza is using those statements to show that being in the Eurozone, rather than being a security blanket, is renouncing your democracy and putting political will in the hands of powerful European leaders hand and the bureaucrats of the EU and the IMF. The Greeks who have for more than two years suffered horrible cuts in the public sector leaving many unemployed, lower welfare and an overall depressed economy are ready for a new political dialogue and to them Syriza looks like the only party that is even trying to offer it.

Tensions are high in Europe with everyone blaming each other on how they reached that place. Many European countries are beginning to accuse Germany and Merkel for enforcing an austerity that is more that what is needed and that is in fact harming the economy rather than helping it. The European Fiscal Compact, the treaty that has been governing European finances since 2012 has been put to question and the EU has began to look less efficient than before. Old accusations, including the fact that the Greek government may have doctored books to join the Eurozone have been resurrected, causing unease in the EU.

Angela Merkel

Before the Greeks go to the polls on January 25th, they should examine their situation carefully and not follow sentiments. It is them who for years elected the PASOK party as it spent them into oblivion, so they are responsible for their predicament. The return to the drachma while it may sound romantic in prospect is something that has not been done before, no one knows the risks. What will the exchange rate be? When will the Greek central bank begin to print them? There are too many questions with no answers. And once the decision to leave the Eurozone is taken, its is almost irreversible. To rejoin the Eurozone, Greece would have to meet requirements that they wont be able to achieve for quite a while. And Syriza for all their bravado, does not seem to have a concrete plan about what they will do other than rebuking austerity and refusing to pay creditors. Austerity might be unpleasant but is the Greek people ready for a full blown depression?

On the 25th, depending on what the Greek people decide, the EU will be the same or very different. There is a chance that we will witness the beginning of the end of the great experiment that is the European Union. Even with Greece staying on the austerity course many questions have been raised with no answers in sight. The year has definitely started on an interesting note.

P.S. happy 2015!