Do You Hear Us, Berlin?
By now, you’ve probably heard that Greece’s Syriza anti-austerity party won the election (probably 2 seats shy of absolute majority). Their new leader, Alexis Tsipras, campaigned on a platform to end austerity and renegotiate Greece’s debt repayments with the Troika, the EU, ECB and IMF. The ripple effect across Eurozone will be swift as the citizens of Spain and Portugal (and others) are keeping a close eye on how Greece will move forward after this rebellious statement. The victory had an immediate effect on the EUR as it hit 1.1098 in early morning trading – an 11-year low – but has since bounced back above the 1.1275 mark.
In his first act as Prime Minister, Mr. Tsipras visited the Kaisariani rifle range where Nazis executed 200 Greeks on May 1, 1944. This is hardly a subtle message to Greece’s paymasters in Berlin and Brussels. Ironically, the neo-Nazi Golden Dawn Party finished in third with 6% of the votes.
After five years of relentless belt-tightening, Greeks have said enough. It’s now up to the country’s euro-area peers to decide how to respond to the electoral landslide of the anti-austerity Syriza party.
The best-case scenario, according to Stathis Kalyvas, a professor of political science at Yale University, is that leader Alexis Tsipras “gets a few carrots,” signs off on a new bailout agreement under a new name, “and gets his party to approve it.” In this case, to which Kalyvas attaches a low probability, Tsipras will “reinvent himself as a social democrat, reform the Greek state, and dominate Greek politics the next 10-15 years.”
With 99.9% of the vote counted, Syriza, an acronym for Coalition of the Radical Left, took 36.3%, two seats short of an absolute majority. Tsipras will still get the mandate to form a government today, after securing the support of anti-bailout Independent Greeks party. Led by Panos Kammenos, Independent Greeks have vowed to negotiate a writedown on the country’s “odious debt.” READ MORE
