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Last Thursday, Greek Prime Minister Alexis Tsipras announced that he was resigning. Tsipras’s Syriza Party, which won the Greek parliamentary elections in January, was coming apart at the seams after Tsipras agreed with Greece’s creditors to enact more austerity reforms. When the Greek Parliament had to approve of this deal last week, Tsipras was forced to rely on opposition parties as forty-three of Syriza’s 149 members either voted against the deal or abstained. Following the vote, twenty-five Syriza members of Parliament (MPs) bolted from the party and this left it without a governing majority. Unable to survive a censure motion and likely fearing that anti-bailout leftists would soon rally against his government, Tsipras resigned and paved the way for new elections next month. The news of new elections was hesitantly received in some European capitals, with Paris and Berlin reminding Athens that it would be held to the terms of the new bailout deal regardless of who won power. Nevertheless, financial markets have been roiled by another Greek election – the nation’s fifth in six years – out of fears that Syriza could lose or that the elections will slow down much needed economic reforms.
This topic brief will explore the factors that are behind the upcoming Greek election, discuss how the election is expected to proceed, and briefly analyze how the elections could create headaches for several members of the European Union (EU).
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The Road to New Elections
Experienced extempers should be used to talking about Greek politics by now as it is likely that they have had to talk about this issue several times over the last few seasons. As with those elections, the new ones arrive with much anxiety about the nation’s dismal economic situation and a lack of enthusiasm for the political establishment. Since the Greek debt crisis began in late 2009 the nation’s traditional political parties have lost credibility, something that they made worse by their expressed willingness to reach financial agreements with other members of the European Union (EU) that would restructure Greece’s generous welfare state and privatize state-owned assets. The entire Greek debt crisis will not be summarized in this brief, but the upcoming elections are once again motivated by the conflicted aims of Greece’s political parties and the nation’s electorate. Whereas the majority of Greeks despise austerity, they are not willing to leave the euro zone. The Christian Science Monitor points out on August 20 that 62% of Greeks voted against the terms of a European bailout in July, but polls now show that 63% support the recent signing of a bailout deal with the nation’s creditors that will inject nearly $100 billion into the Greek economy and help it pay its debts. When it was elected in January, Syriza, a far-left party, campaigned on the idea of ending austerity, standing up to Europe, but doing so in a way that would keep the nation within the euro zone rather than going back to the drachma. Economists rightly noted that these aims were unrealistic and new elections are arriving as a direct result of this disconnect between the possible and the improbable within Syriza’s ranks.
The loss of Tsipras’s governing majority is what directly led to the move for snap elections in Greece. Although elected on a platform of opposing European austerity conditions, Tsipras eventually agreed to enact more austerity policies so that the EU could issue $98 billion of funding. These policies will include raising the age at which Greeks are eligible to collect a state pension, imposing an increased value added tax (VAT), and privatizing some of the nation’s state-owned assets. These policies were anathema to many far-left members of Syriza, who thought that any agreement with European nations that did not involve debt relief constituted a betrayal of their party’s core principles, and they decided to bolt when the Greek Parliament had to vote on whether to accept the European bailout plan. The Agence France Presse reports on August 21 that when Tsipras brought the bailout legislation before parliament, forty-three Syriza members either voted against the legislation or abstained. This derailed Syriza presenting a unified effort to the public and forced Tsipras to rely on traditional political parties such as the centre-right New Democracy and the socialist PASOK to push the bailout through. After the vote passed, twenty-five anti-bailout rebels bolted from Syriza, leaving it without enough votes to command a majority in the Greek parliament. Tsipras might have been able to hold on if he was able to coalition with another party, but he refused. Bloomberg writes on August 23 that New Democracy reached out to Syriza, but Tsipras argued that both parties are too far apart on too many issues to form a government of substance.
At the time of this brief, other parties were still jockeying to form a new government before new elections were held. Although in most parliamentary systems the resignation of the existing government would prompt an immediate declaration of elections, the BBC reports on August 20 that Greek election law gives the second-largest and third-largest parties a chance to form a government if an existing one collapses in less than a year. Reuters on August 22 writes that this means that New Democracy and the newly formed Popular Unity, the political faction created by the Syriza rebels that abandoned Tsipras, will have chances to form a government before a declaration of new elections is made. However, it is highly unlikely that either party will be able to form a new government. New Democracy already failed to do so and Popular Unity has until the middle of this week to try as well, but its odds are slim since anti-bailout members of Parliament only occupy fifty-seven of 300 seats. An official declaration of new elections is bound to come by the end of this week with an election date tentatively predicted for September 20.
The New Election Campaign
Greek’s are no strangers to elections. The next elections will be the fifth in six years and its fourth in three years. Also, Greek voters just went to the polls a couple of months ago to voice their displeasure with the conditions of a new economic bailout. There is not a lot of enthusiasm for new elections, although several Greek political observers predicted that Tsipras was likely to schedule a new election in October. This would have solidified the standing of his government when the EU came to audit Greece’s progress on implementing the reforms called for in the recent bailout.
Extempers should realize that Tsipras likely called the elections for four reasons. First, the EU’s bailout conditions are likely to cause some pain for Greeks and are bound to be received negatively once they are implemented. Newsweek writes on August 22 that Tsipras is telling voters that he got the best deal possible from the EU, but his ability to win a governing majority will be easier if he can campaign on a vague future rather than in the midst of economic reforms that will disrupt the Greek welfare state. And second, having the election take place so soon is likely to inhibit the ability of anti-bailout rebels to combine their forces. CNN writes on August 21 that although Popular Unity, led by Energy Minister Panagiotis Lafanzanis, is likely to clear the 3% threshold to get into parliament, it is unclear how much support it will receive. With the elections taking place so soon, Popular Unity may find it difficult to build a campaign infrastructure to match Syriza and other parties. Third, Tsipras’s other political opponents are still quite weak. The Wall Street Journal writes on August 21 that established parties have not been able to regain their support since the economic crisis began in Greece and The Christian Science Monitor reveals that Syriza has a 33.6% approval rating versus 17.8% for New Democracy, which is the second-most approved party. And fourth, Tsipras likely wants to claim a mandate to implement the bailout conditions.
The campaign could become quite messy, though, especially if it causes Tsipras to make statements that are perceived as contradicting the agreements that he just reached with Greece’s creditors. The New Yorker writes on August 20 that Popular Unity is likely to campaign on leaving the euro zone and restoring the drachma, as well as bash the EU as a “dictatorship.” Popular Unity is also likely to argue that the bailout conditions violate Greek sovereignty and contravene the principles of social justice. If this message begins acquiring a popular hearing, Tsipras may feel pressured to try to outflank elements of the far-left, but doing so may undermine confidence that Greece is actually going to implement necessary reforms. Some of this anxiety already exists in the markets as The Guardian writes on August 20 that two-year bond yields for Greece jumped 12.15% after Tsipras announced his resignation and the Greek stock market closed down 3.5%. An election may also muddy the waters if Tsipras fails to win a governing majority. Although Greek law stipulates that the party that wins the most votes gets fifty additional seats – a policy that Forbes says on August 22 was enacted due to Greece’s history of parliamentary governments that enjoyed slim and ungovernable majorities – it is a very real possibility that Tsipras will be forced to form some type of moderate coalition. The CNN article previously cited explains that Tsipras could try to reform Syriza’s coalition with the Independent Greeks, but test polls show that the Independent Greeks may not clear the 3% threshold to enter parliament. Tsipras could then turn to PASOK, the newly formed moderate To Potami Party, or New Democracy, but it is unclear whether he would be willing to do this. Prolonged negotiations over a new government following the elections could further endanger Greece’s credibility with creditors, who are growing increasingly impatient over Greece’s continual political maneuvering.
Nevertheless, it is virtually guaranteed that Syriza will “win” the parliamentary election so long as one defines winning as taking the majority of seats. As already noted, Syriza remains the most popular party in Greece and there is not a viable alternative to replace it. Tsipras is likely to campaign on a platform of implementing a bailout deal that was the best Greece could have hoped for. He may also sell the bailout as the only way that Greece can hope to unlock funds to solve other growing social problems, most notably a surge of migrants that are trying to enter Greece from Macedonia and Turkey.
However, a radical party – the neo-Nazi Golden Dawn – is likely to benefit the most from the elections. Whereas Syriza is trying to stay in the governing majority and implement a controversial austerity program, thereby compromising some of its initial principles, Golden Dawn’s core issues – nationalism and immigration – are becoming more significant for voters. Greeks still dislike the EU despite their willingness to go along with the new bailout and Greeks that dislike the immigration situation are more likely to cast ballots for Golden Dawn. Although mainstream political factions have refused to include Golden Dawn in their political negotiations, its continued relevance in Greece despite state prosecution of its leaders for criminal activities shows that political radicalism continues to flourish amid political and economic stagnation. CNN notes that if Golden Dawn wins more votes and increases its share of seats to more than seventeen that it could complicate Tsipras’s process of building a new coalition and further Greece’s political deadlock.
Looming Headaches for Europe
The EU has maintained Greece thus far despite calls to let it default. The new bailout created consternation in several European capitals, with The Business Insider reporting on August 21 that Germany and the Netherlands have publics that are beginning to tire of continuing assistance to Greece. In Finland, the True Finns received significant support in national elections this year by questioning the EU’s policies toward Greece and if Greece continues requiring aid then other European governments, especially more prosperous ones in Northern Europe, are likely to come under fire. At present, Germany and France are trying to convince their publics that the Greek elections will not significantly change the terms of the bailout. The Globe & Mail on August 21 writes that Berlin announced after Tsipras’s election that it fully expected Greece to move forward on austerity measures and Paris said that it looked forward to working with the new Greek government. The European Commission also said that it was looking forward to Greece continuing to implement its agreements with creditors.
Still, there are some anxieties within the EU and its member states that Greece is once against engaging in a song and dance where it will accept the EU’s money but implement few austerity measures. U.S. News and World Reports writes on August 21 that Europeans have warned Greece that even if an anti-bailout government is elected that the terms of the bailout will still apply to it since the bailout was an agreement with the nation of Greece and not a specific political entity. Also, the time frame by which a new government will take power could complicate work toward economic reforms. The Washington Post writes on August 20 that a caretaker government is currently in place, headed by Supreme Court President Vassiliki Thanou, who is the first female prime minister in Greek history, but this government has virtually no foreign policy powers. The BBC argues on August 21 that new elections will put reforms on hold for another six weeks and U.S. News and World Report notes that this could handcuff Greece’s ability to show creditors that it is making enough progress toward austerity in time for its first program review in October. A delay of implementing reforms is likely to make other European capitals more frustrated in dealing with Greece and will embolden political forces in Finland, the Netherlands, and Germany that wish for Greece to be expelled from the euro zone.
Extempers should not view the upcoming Greek elections as a complete waste of time. Yes, Syriza will likely win, but what really matters is the size of its victory and whether Popular Unity is able to steal away a sizable chunk of Syriza’s old electorate. There are also questions of whether older parties can re-establish themselves in Greek politics and whether any will coalition with Syriza if it fails to win a majority. And furthermore, the elections could be a boon for Golden Dawn, further frustrating efforts to show creditors a united front and the ability of Greek politicians to create a government committed to the economic reforms that Greece needs to become economically viable in future years.