The Greek Compromise

At the end of January, Alex Tsipras was swept into one of the most powerful positions in Greece on a tidal-wave of radical rhetoric and broad mass appeal. Utilising his skills an orator and astute political posturing, his party, Syriza, secured 149 out of 300 seats in the Hellenic Parliament. As the new PM, his ruthless pragmatism immediately came to the fore as he chose to join forces with the only other anti-austerity party: the right-wing populist party, the Independent Greeks, who came from the opposite side of the political spectrum. It is this same ruthless pragmatism that has spearheaded Syriza’s evolution from a party of protest to a party of government. Tsipras has found himself being forced to tone down and moderate his position in order to facilitate cooperation with the once derided ‘troika’ of creditors: the European Commission, the ECB (European Central Bank) and the IMF (the International Monetary Fund). However in the process of doing so, he has further facilitated an increasing sense of cynicism amongst Greek voters, as they reluctantly recognise that the radical rhetorical promises have yet to be repeated or realised the since the election.

Image Courtesy of Zagreb1234 © 2013
Image Courtesy of Zagreb1234 © 2013

Syriza’s recurring theme throughout the election was that the Samaras government had become so enamoured to the German government, that they had become blind to the desperate plight of the Greek populace. They were wilfully presiding over a humanitarian catastrophe. “Our people too have a right to joy and celebration. For five years, they [the troika] had taken both away from us.”[1] Since 2008, the percentage of individuals crippled with un-payable medical costs more than doubled to just under 15% whilst those categorised as at serious risk of poverty soared to encompass 37% of the Greek population.[2] Undoubtedly, as levels of human suffering continued to rise exponentially the recognition of such pain rippling through communities was a salient factor in the mass mobilisation that contributed to Syriza’s ascent to power.

Consequently, Syriza’s electoral promises focused on policies that would alleviate such a desperate plight. As wages stagnated, rising energy costs were pushing more and more into poverty and so up to 300,000 households that lived under the poverty line were promised up to 300 kWh of free electricity per month. For the ‘squeezed middle-class’ an unpopular tax on heating fuel would also be scrapped. The elderly were promised a reinstatement of the Christmas bonus pension for all those who had to survive on under €700 (£524; $795) a month. Those that were on the verge of being made homeless would also be given relief, as protection would be introduced for all those with mortgage arrears on their primary residence to prevent any seizure of property. To tackle the 15% with un-payable medical costs, all those without jobs and medical insurance would be given free medical care so as to ensure comprehensive and universal access to medical services throughout Greece.

However as popular as such campaign pledges were to tackle the ‘humanitarian disaster’, they were also largely unfunded. Since the election Tsipras seems to have, therefore, nuanced his position, perhaps in recognition of Greece’s precarious financial position. Whilst key electoral commitments, such as the promise of free electricity to the neediest or the protections against homelessness, are repeated, they are done so with an addendum (perhaps to subtly reassure international creditors and markets). The “fight against the humanitarian crisis [will have] no negative fiscal effect”.[3] This significant shift in tone may be illustrated by analysing the slight evolution of Syriza’s policy regarding those too poor to feed themselves. Before the election, Tsipras announced that should they win power, there would be food subsidies introduced for up to 300,000 Greeks who have no income. Yet this pledge now seems to have been watered down, as the government’s most recent plans describe non-financial offerings (such as food stamps) as the solution to feeding Greece’s hungry. It is precisely such slight, but nonetheless gradually accumulating, shifts in tone that are facilitating the increasing cynicism within Greece.

A further illustration of such a pattern may also be seen with Syriza’s approach to the issue of Greece’s debt; its significant writing off being a central focus during the election. As it stands, Greece is currently indebted to the tune of €322bn (£236bn; $364bn), which makes up a staggering 174% of its gross domestic product (GDP). Much rhetoric was expended highlighting the unfeasibility of such a high debt to GDP ratio as well as the intrinsically unfair structure of the debt repayment scheme, whereby the financing of the debt was linked to the budget and not to economic growth. They further called for the European Central Bank to purchase Greek sovereign bonds under the monthly €60bn (£45bn; $68bn) ECB program of quantitative easing and a ‘moratorium’ on debt payments (effectively thus ending the bailout package). However, once again, the rhetoric did not quite match with the reality.

Soon after winning the election, the Syriza government were faced with a pressing deadline: there needed to be a reaffirmation of the bailout terms and conditions otherwise further instalment would not arrive in time to meet the next tranche of debt maturing. The ‘significant moratorium’ on debt payments did not happen – in fact there was a large degree of compromise on behalf of the Greek government so that they would not run out of money under the bailout package to pay debt. The debt write-off never happened, although Syriza has still not ‘officially’ abandoned the idea. The campaign promise to halt the incessant privatisation, which has included major Greek public institutions such as the port of Piraeus and the large energy company Public Power Corporation of Greece, was similarly compromised. Although they never committed to roll back the completed privatisations, Tsipras and his new Syriza government have now further conceded that they will respect processes already under way, which for many, even within the Syriza party, is seen as a major climb down.

Within a five year period, Syriza was propelled from being a minor radical fringe party to a party of government. Yet the realities of power have viciously choked the radical rhetoric that once flowed freely. International creditors were not as amenable as the Greek public to significant renegotiations of agreed bailout packages. It is therefore perhaps unsurprising to note the many compromises that Syriza has been forced to make – from watering down its ambitions regarding privatisation, debt write-offs and moratoriums to shifting to non-fiscal forms of support for the most disadvantaged. However whilst it is more readily apparent to chart Syriza’s climb-downs, it has not been a one-way street. The very fact that the renegotiations began at all, in contrast to the strong rhetoric emanating from Germany and other international creditors, is in itself an achievement. Nor should it be forgotten that Syriza has shifted the international dialogue regarding Greece to incorporate the human impact that many of the ideological posterity policies had. Though there has been an increased level of cynicism amongst the Greek populace due to the significant levels of compromise at the first major international hurdle, Syriza’s achievements should not be forgotten. Indeed the very nature of its reforms suggests a long-term perspective so that whilst the first renegotiation may have meant significant degrees of compromise this may not be the case four months later at the next series of discussions. As Tsipras notes, the rescue of Greece from ideological austerity policies is not a battle “but a war.”[4]





Leave a Reply