For what was widely expected to be the grand finale of the Greek snap election campaign—the country’s seventh since 2012—I drove to Thessaloniki, 400 miles south of Belgrade. Greece’s marvellous second city of half a million prides itself on being the country’s cultural and artistic capital, and its diversified economy offers a broader cross-section of opinion than Athens.
It was a disappointing experience: no buzz, no excitement. Having witnessed general elections in a dozen countries over three decades, I was struck by the public’s palpable indifference to last Sunday’s event. My interlocutors, regardless of political persuasion, were in agreement on one key point: Greece has already agreed to the troika’s stringent austerity terms (IMF-ECB-EC), which leaves the country of 11 million permanently indebted to the bankers and shackled within the eurozone. “It does not really matter what coalition supervises the surrender” was the resigned comment of Andreas, the middle-aged receptionist at my hotel. “I will vote, but for the first time I am not sure for whom . . . or whether it makes any difference,” said Isaak (57), my accountant friend. “We’ll have to stick with the euro, it seems, and we’ll have to pay the price.”
The turnout, at 56 percent, was the lowest in Greece’s modern history. It reflected voter fatigue after the previous general election last January, and (as it turned out) the meaningless referendum on rejecting austerity measures in July. A million and a half Greeks who voted in that referendum did not bother to turn up at the polling stations last Sunday. The outcome leaves the country’s political balance unchanged. Prime minister Alexis Tsipras’ leftist Syriza won 35 percent of the vote and it will continue to rule, but being six seats short of an absolute majority in the 300-seat parliament it will maintain its unlikely coalition with the right-wing Independent Greeks. The big loser is the “conservative” New Democracy (stagnant at 28 percent), an establishment center-right party devoid of ideas and energy. The nationalist, anti-immigrant and euroskeptic Golden Dawn is a distant third (7 percent), which was a success considering its relentless demonization by the media. The once-powerful socialists (Pasok) are now the marginal fourth party, almost on par with the unreformed communists. Syriza’s diehard dissidents who opposed the deal with the troika, Popular Unity, have failed to cross the three-percent threshold.
The good news is that the New Democracy-Pasok duopoly of yore is finally dead. This quasiconservative-quasisocialist bipartisan machine was founded on patronage and clientelism, and it ruled the country for three and a half decades after the fall of the colonels in 1974. It was responsible for Greece’s permanent debt crisis, having squandered tens of billions of borrowed euros on tenured civil service jobs for the party-connected boys and on crony-capitalist deals that benefited nobody but a thousand crooks and oligarchs. Tsipras’ reelection was largely due to the Greeks’ unwillingness to give the old crooks another chance.
The bad news is that Tsipras is a leftist demagogue with no strategy for Greece’s future and no integrity. “Today in Europe, Greece and the Greek people are synonymous with resistance and dignity,” he declared at the victory rally in Athens. “This struggle will be continued together for a full four years.” This is rubbish. On July 12 he agreed to the $100 billion poisoned “bailout”—having won the referendum to resist its terms only days earlier—from which the vulnerable Greek pensioners (many of them making ends meet on $700 a month) and unemployed youths (over 50 percent) will not receive a single penny. Most of it will go to the servicing of Greece’s massive, unsustainable debt which can never be paid off, and to keeping the banking system barely solvent. Tsipras’ U-turn last July—sticking with the euro and accepting austerity terms—was performed in blatant disregard of democratic mandates and for no good reason. It dooms the country to zero growth for years to come, and foreign lenders are the real winners. Let it be added that in his victory speech Tsipras barely mentioned the ongoing migrant deluge in which Greece is a major point of entry from Turkey, and which has turned the country’s northeastern Aegean islands into disorderly Third World camps.
Until two months ago the enfant terrible of Brussels, Tsipras was swiftly sent congratulatory messages from EU leaders who urged him to move swiftly on “reforms.” He says that his “first crucial battle” will be the quest for debt relief from the creditors, but he has no aces up his sleeve and no negotiating space. Germany is adamant that no debts will be written off: only some minor adjustments to the repayment schedule are likely. Even if Greece’s annual debt-servicing is eventually capped at 15 percent of its economic output over the long term, as Tsipras hopes, the prospects of recovery are nil. The new/old government is obliged to implement tax hikes and spending cuts mandated by creditors under the bailout, and he can only seek minor adjustments in a few “gray areas” of labor reform and pension plans. All along the nominally non-political European Central Bank is acting as the creditors’ de facto enforcer, exercising stringent control of bailout funding without which Greece’s financial system would collapse.
No feasible scenario offers much hope of fresh investment needed to kick-start the economy. “We have difficulties ahead of us but we also have a solid ground, we know where we can step, we have a prospect,” Tsipras declared last Sunday night. “Recovery from the crisis cannot come magically, but it can come through tough work.” That is untrue. For as long as she remains in the eurozone Greece will be unable to devalue her currency or to raise interest rates, and no amount of hard work can offset this structural handicap. After the election Germany’s finance minister Wolfgang Schäuble has reiterated that Greece will have to adhere to the letter, as well as the spirit, of the bailout agreement. This means that there will be no “haircuts” and no renegotiated terms. Ironically, the countries in the troubled European periphery—Italy, Spain, Portugal and Ireland—strongly support stringency vis-à-vis Athens, having failed to obtain more lenient terms for themselves.
As Tsipras’ former finance minister Yanis Varoufakis has noted, Tsipras must now implement a fiscal consolidation and reform programme that was designed to fail: “Illiquid small businesses, with no access to capital markets, have to now pre-pay next year’s tax on their projected 2016 profits. Households will need to fork out outrageous property taxes on non-performing apartments and shops, which they can’t even sell. VAT rate hikes will boost VAT evasion. Week in week out, the troika will be demanding more recessionary, antisocial policies: pension cuts, lower child benefits, more foreclosures.”
In the cradle of democracy elections have become meaningless. Syriza won last January on the platform of austerity reversal and debt relief. Last Sunday it was reelected, with the support of fewer than one-fifth of Greece’s registered voters, with the vague promise of improving a bad deal it signed last July in blatant violation of its earlier promises. Tsipras remains in office, but not in power. The legitimacy of the entire process is dubious, yet its outcome conforms to the interests of Brussels, Berlin, Frankfurt and Washington. This is a fine example of managed democracy in action: final outcomes are preordained, and the process leading up to their attainment is formally sound. In that respect at least, Greece’s 11 million people are no worse off than their European and American cousins.
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