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Greek politics back to square one: Bucking the broader trend in Europe

Muhammad Mahmood | Published: July 20, 2019 21:15:00


Leftist SYRIZA leader Alexis Tsipras, who guided Greece through one of the worst episodes of the euro debt crisis, concedes defeat to New Democracy leader Kyriakos Mitsotakis in the 2019 general election of the country on July 07. —Photo: Reuters

The July 07 election in Greece saw the centre-right opposition leader Kyriakos Mitsotakis leading his New Democracy (ND) Party to victory. He secured 39.9 per cent of the vote which was translated into a comfortable majority of 158 in the 300-seat parliament. However, the voter turnout in the election reached a record low with 44 per cent abstention, the highest voter abstention rate in parliamentary elections in Greece since 1974. In effect, every second person in the country did not vote. It was the country's first summer parliamentary election since 1928 and sweltering summer temperature at 39 degrees Celsius likely to have contributed to this very high rate of abstention where voters decided to spend day at the beach rather than turning out at the polling booth.

Alexis Tsipras's party, Coalition of the Radical Left (SYRIZA), which was in power since 2015, got 31.5 per cent of the vote. Mr Tsipras came to power with a strong defiant note against an international bailout and the concomitant austerity that was attached to it, but faced with the daunting economic challenges, he finally acceded to the demands of the Troika - The European Commission (EC), The European Central Bank (ECB) and the International Monetary Fund (IMF). The economic medicine that was dished out was pretty strong given the fragility of the Greek economy. He succeeded in getting his party members to fall in line to carry through the prescribed austerity measures. His economic policy measures saw significant cuts in pensions and raised taxes (e.g. VAT at 24 per cent) and trimmed public spending with the objective to turn the budget into surplus for years to come.

Mr Tsipras did manage to bring about some degree of normalcy to the Greek economy achieving a growth rate at 2.0 per cent for the current fiscal year but unemployment remains stubbornly high at 18 per cent which is considered rather very high by the European standard. He also pushed through a historic but unpopular agreement with neighbouring "Macedonia'' under which that country has changed into "North Macedonia".

The election result was a stinging blow to Mr Tsipras. Conceding defeat, he said "The citizens have made their choice. We fully respect the popular vote. In democracy, the change in governance is the essence of democracy''. He further added "We will protect the rights of working people with responsible, but dynamic opposition''. But the most poignant declaration he made was "We hold our heads high as the Greece we are handing over in no way resembles the Greece we took over four years ago. We hand over a country that is free again''.

For Mr Tsipras it was almost like a re-enactment of a Greek tragedy as he was in his anticipated final moment of glory exiting from the final bail out deal in the summer of 2018 when deadly wildfires broke out which saw the death of over a hundred people in Greater Athens. The moment of his great glory was drowned in public outcry as he was left to deal with the tragedy.

Mr Tsipras was right in his assertions. It was almost a decade ago that Greece triggered a global panic by revealing that it cooked the books in order to join the EU common currency the  "euro''. It was widely speculated that Greece would exit the eurozone precipitating the imminent collapse of the zone itself. But Greece is still there and also the EU (European Union). More importantly Greece's economic recovery is underway, albeit at a very modest rate of about 2.0 per cent for the next three years.

Mr Mitsotakis was sworn on Monday (July 15) as Prime Minister. He was graceful in his victory speech and vowed to "work hard to represent all Greeks. We are too few to stay divided''. He further added "Society delivered a clear message in favour of growth, job-creation and security''. His rise to power is testament to his tenacity. Also seen from a European perspective when centre-right parties are struggling to win elections convincingly, the resurgence of his centre-right ND is a remarkable political feat.

The election results also indicate the radical shifts that the country's political system has undergone amid a decade of extreme financial hardship. Mr Mitsotakis, a former banker and son of a former prime minister, is a liberal but leading a conservative party. He is in essence a member of the old political establishment elite.  He will face challenges in undertaking his reform agenda both internally and externally.  If he pushes through his declared reform agenda such as reforming the public sector, maintaining strict fiscal discipline and dealing with default loans, this is likely to irk his many party members and other vested interests in the country. Also, the Troika would be unlikely to give him space to cut taxes which he has promised to do. Greece still remains on the monitoring radar of the Troika on its repayment schedule and observance of stringent fiscal discipline.

The election results suggest back to square one. In Greece, politics has been largely a family affair like in South Asian countries like Bangladesh, India, Pakistan and Sri Lanka dominated by families such as Karamanlises, Papandreous and Mitsotakises since mid-1970s. With the return of Kyriokos Mitsotakis as head of New Democracy (ND) party now to power is like re-enactment of a drama. Two Karamanlises, including a former prime minister, are back in parliament; the other one is a minister in the current cabinet. Mitsotakis' sister is also a member of parliament and her son is the Mayor of Athens. George Papandreou, the former PASOK prime minister, is also back in parliament under the banner of his new party - Movement for Change.            

Mr. Mitsotakis is the scion of a Greek political dynasty; his father Konstantinos Mitsotakis served as a prime minister under the banner of the same party. He also comes from the same political establishment (largely composed of ND and PASOK) that was responsible for cooking the books to get entry into the eurozone, thus plunging the country into the financial crisis from which the country is still reeling.

The July 07 election in Greece in effect confirmed the trends set in motion by the European Parliamentary elections in May. But the results ought to be judged by the "new normalcy'' brought about by SYRIZA. This new normalcy appears to be leading to olden days bipartisan politics (two main parties replacing each other in turn) - ND and Social Democratic PASOK in the past. In fact, Mr Tsipras clearly indicated his party's willingness to move from a left populist platform onto occupying the centre-left space traditionally occupied by PASOK enabling the party, to quote Mr Tsipras, to transform SYRIZA into a "great democratic party''. SYRIZA still can take great comfort in the fact that it secured 31.5 per cent of the vote with 86 seats and its share of votes only declined by 3.9 per cent from the previous election. It has a very comfortable base as the opposition party.  SYRIZA's high percentage of vote, at above 31 per cent, is a strong indication that Greece is likely to revert to a strong two-party system after years of fragmentation.

On a much closer look ND did not win any significant number of votes from SYRIZA supporters. Increased support for the party largely came from the collapse of votes of the smaller nationalist right and centre-right parties. Also, ND took a crack at the collapse of votes for the Neo-Nazi Golden Dawn (GD) party. This is also another sign of the resilience of Greek democracy in the face of formidable economic challenges when other European countries saw the resurgence of ultra-right authoritarianism under the similar economic situation.

The Greek election bucked the broader European trend in a significant way where the far-right Golden Dawn (GD) is out of the parliament failing to secure 3.0 per cent threshold. This will significantly weaken the neo-Nazi support base in Greece, unlike most other European countries where they have been gaining increasing strength. While the Greek parliament would be less fragmented as many parties could not make it to achieve the threshold to send representatives to   parliament, MeRA25, the party of former finance minister Yanis Varoufakis, gained representation in the parliament with 9 (nine) seats from the left side of politics. Also, the right-wing Greek Solution entered parliament for the first time with 10 seats. This party made a dent into GD votes.

While some significant progress has been made under outgoing SYRIZA government under the leadership of Mr Tsipras, yet Mr Mitsotakis is still saddled with enormous challenges ahead of him. These challenges include a huge debt burden (at 181 per cent of gross domestic product or GDP), very slow growth prospects, a moribund industrial base, weak financial institutions weighed down by massive bad loans, shrinking population and a bloated and inefficient public sector. Now his task is to return to growth trajectory and stability in a country that   has remained mired in a decade-long financial crisis which took a severe toll on living standards of its people.

Muhammad Mahmood is an independent economic and political analyst.

muhammad.mahmood47@gmail.com

 

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