Analysis by Danaë LAZARI
On Sunday, the ballot box called to the Greeks for the third time in less than a year, to vote in what Interior Minister Antonis Manitakis referred to as “among the most crucial elections since the restoration of democracy [in 1974]”. Pre-election polls showed ex-Premier Alexis Tsipras and his left-wing party Syriza neck-and-neck with centre-right New Democracy (ND), but the vote was surprisingly clear. Following his brief respite from governance, Tsipras was re-instated with 35.4% of the vote, to ND’s 28.1%.
The Greek crisis has been out of the spotlight for some weeks, but no news has not meant good news. Three weeks of capital controls imposed on banks in July have caused massive damage to the country’s already wheezing economy, with economists suggesting it could quite soon collapse (in the second half of this year). GDP is expected to contract by 1.4%, and the unemployment rate, at a consistent 25% for the last four years, is expected to increase again in 2016.
When Tsipras signed a harsher bailout agreement than the one Greeks rejected in a referendum last July, it drove a wedge through his party. Having lost his majority, he called the snap election in order to restore his democratic mandate. In the meantime, the more radical members of his party broke off to form their own far-left party, which subsequently failed to get any seats in parliament. Tsipras therefore finds himself in possibly the best position he could find himself in the aftermath of the election – back in power with just four less seats in his ruling coalition than before, but lacking the more radical voices in his party.
This does not mean that implementing reforms will be easy. Syriza remains a shaky party, with many of its ideologically faithful unhappy with the way Tsipras handled the bailout negotiations. Allying himself with the openly Eurosceptic right-wing Independent Greeks (Anel) further increases the risk of internal spats that could lead to defections, and simultaneously reduces the possibility for Tsipras to align his party with more centrist parties, such as Pasok, which would stabilise his four-seat parliamentary majority.
Nevertheless, the result has both given Tsipras a clear mandate to implement his agreed reforms, and reaffirmed Greek’s desire to retain their ties with the EU. The government now needs to: prioritise recapitalising the banks, which are likely to remain reeling from the capital controls for some time; ensure that finances are on track to meet its budget-surplus goal (3.5% by 2018); and attract investment to attempt to bring down the shocking unemployment rate. Simultaneously, Tsipras will try to tackle long-standing problems inherent in Greek politics – to modernise or realign the system by attempting to at least weaken the clientelist system, which sees rent-seeking groups bought off with tax breaks, job promises, etc. The road ahead remains long, and it remains rocky.
That the road is rocky is well-known. “The economic situation is going to get worse in the coming time and that will start to affect the labour market,” Nick Kounis, head of macroeconomic research at ABN Amro Bank NV states. “That partly explains the timing of this election – to get it in before the bad news really hits home to the electorate.” However, the voter turnout tells a different story. Only 56.6% of eligible Greeks turned out to vote on Sunday – a record low since the restoration of democracy. There are a myriad of factors to be considered when looking at the record abstention – that this has been the fifth general election in as many years, the third call to the ballot box in 2015 alone. When Tsipras came to power in January he was propelled by the rhetoric of roll-back of austerity – only to perform an incredible kolotoumba seven months later. Young Greeks, traditionally the most supportive of Syriza, questioned the point of voting for a government with so little room for manoeuvre; whilst others felt that their vote would not change the inevitable hardship that is to come.
Tsipras now has a chance to actually make good on some of the constructive promises Syriza made months ago. With the focus perhaps taken away from negotiating in Brussels, he may be able to tackle some of the intrinsic problems that have undermined Greek politics for years. A colossal and unenviable task, but one whose course will be interesting to follow.