World
Vladimir Nesterov
August 30, 2015
© Photo: Public domain

To be able to follow the twists and turns in the Greek drama, we need to remember that after the 2008 crisis, the Troika of creditors (the ECB, the IMF and the European Commission) imposed external economic governance on Greece, calling it «assistance» and «escape from default». The Troika was not saving Greece, but the money of Greek government bond holders – German, French and American banks – by cutting social expenditure and selling state-owned property (first and foremost to Germans). 

Under these conditions, the victory of the Coalition of the Radical Left (Syriza) in the early parliamentary elections in January 2015 was greeted by the majority of Greek society as deliverance and its young leader, Alexis Tsipras, was all but regarded as the Messiah. His statements matched those of a saviour as well: «Greece has turned a page. The Greek people have written history. The Troika is in the past and we have put an end to austerity forever… We will change the EU from within.» So said Tsipras seven months ago. On that night, 25 January 2015, it felt to the Greeks as if anything was possible…

* * *

In July, however, unable to get the Troika to even partially write off its debts and ease credit conditions, Alexis Tsipras’ government put the issue of accepting the ultimatum of international credits to a national referendum. The people said a firm «No» to new plans for the ultimate subjugation of Greece with 62 per cent of the votes.

But the usual political goings-on followed: despite the «No» of the people, the government voted «Yes», accepted all the creditors’ demands and signed the terms of a new aid package (the so-called «Third Memorandum») that is even worse than the package the Greeks rejected in the July referendum.

The victory of the Syriza coalition in the January elections was secured by two mutually exclusive promises to voters: Greece would remain in the Eurozone; and Greece would not submit to the Troika’s conditions. Now the Greeks have both the euro and the Troika.

This step caused a split in the ruling Syriza party and a new political crisis. When voting to ratify the third aid programme, Syriza’s left wing, headed by the former Minister of Productive Reconstruction, Environment and Energy, Panagiotis Lafazanis, strongly opposed a new agreement with international creditors, blaming Alexis Tsipras for breaching his pre-election promises.

Lafazanis formed a new parliamentary group, Popular Unity, made up of 25 deputies, later joined by another 53 Syriza.

The economic cost of the new concessions to international creditors to the Greeks needs particular mention. Greece will receive an aid package totaling €86 billion, but the mode of external economic governance is being stepped up and the Troika will continue its regular monitoring of the Greek budget. An important new feature is that there will be a privatisation trust fund to finance Greek ‘aid’ containing Greece’s largest state assets to the tune of €50 billion, which will be handed to creditors should the country be unable to repay its debts in the future. These assets include largest banks – Alpha, Piraeus Bank and National Banko; gas importer and distributor DEPA; Helpe oil refinery; airports; and other infrastructure facilities. The government has already approved the sale of 14 of the country’s regional airports to the Germany company Fraport AG-Slentel Ltd.

In addition, Athens is obliged to continue its tax reforms, simplify its employee dismissal procedure, abolish early retirement, and liberalise its gas and pharmaceutical markets as well as its housing and utilities services. A number of measures harmful to the Greek economy such as increasing the VAT for tourism businesses on the islands were approved by the Greek parliament back in July.

In spite of Tsipras’ pre-elections promise, Europe has remained unchanged and the Troika has imposed new and savage austerity measures on Athens. Only Syriza has changed: the party has split in two.

* * *

Finding himself in a parliamentary minority, Tsipras decided to resign and go to early elections. The third national vote this year is tentatively scheduled to take place on 20 September.

It seems that Tsipras’ actions pursue two objectives. On the one hand he wants to break with the left wing of the Syriza party, which voted against the austerity programme in parliament. On the other, he wants to get a new mandate from the electorate before the new austerity programme is launched in Greece and the sale of state-owned assets begins.

Brussels has supported Tsipras’ decision to hold early elections and sees it as a possibility to strengthen support for the European Stability Mechanism aid programme, which Tsipras only recently signed on behalf of Greece.

The timing of the early elections seems to have been chosen well. The Greek people understand that the problem of its humiliating external dependence is not being resolved, although banks and cash machines are working again, and it produces a calming effect. Everyone would like to think that the worst is behind them.

But the public mood may change rapidly.

It is likely that those people who chanted, «We’ve had enough humiliation!» on the evening of the referendum may not vote for Tsipras, who himself has humiliated them. It is also possible that the elections will end in deadlock, where none of the parties gain a big enough majority to create a stable government.

The unpredictability of the whole course of social and political life in Greece is increasing with each passing day.

For the time being, the country’s helm is in the hands of its top Supreme Court judge, Vassiliki Thanou-Christophilou, who became caretaker prime minister – the country's first female PM. Her main objective is to form an interim government until elections take place in September.

The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.
Modern Greek Drama Plot Twist

To be able to follow the twists and turns in the Greek drama, we need to remember that after the 2008 crisis, the Troika of creditors (the ECB, the IMF and the European Commission) imposed external economic governance on Greece, calling it «assistance» and «escape from default». The Troika was not saving Greece, but the money of Greek government bond holders – German, French and American banks – by cutting social expenditure and selling state-owned property (first and foremost to Germans). 

Under these conditions, the victory of the Coalition of the Radical Left (Syriza) in the early parliamentary elections in January 2015 was greeted by the majority of Greek society as deliverance and its young leader, Alexis Tsipras, was all but regarded as the Messiah. His statements matched those of a saviour as well: «Greece has turned a page. The Greek people have written history. The Troika is in the past and we have put an end to austerity forever… We will change the EU from within.» So said Tsipras seven months ago. On that night, 25 January 2015, it felt to the Greeks as if anything was possible…

* * *

In July, however, unable to get the Troika to even partially write off its debts and ease credit conditions, Alexis Tsipras’ government put the issue of accepting the ultimatum of international credits to a national referendum. The people said a firm «No» to new plans for the ultimate subjugation of Greece with 62 per cent of the votes.

But the usual political goings-on followed: despite the «No» of the people, the government voted «Yes», accepted all the creditors’ demands and signed the terms of a new aid package (the so-called «Third Memorandum») that is even worse than the package the Greeks rejected in the July referendum.

The victory of the Syriza coalition in the January elections was secured by two mutually exclusive promises to voters: Greece would remain in the Eurozone; and Greece would not submit to the Troika’s conditions. Now the Greeks have both the euro and the Troika.

This step caused a split in the ruling Syriza party and a new political crisis. When voting to ratify the third aid programme, Syriza’s left wing, headed by the former Minister of Productive Reconstruction, Environment and Energy, Panagiotis Lafazanis, strongly opposed a new agreement with international creditors, blaming Alexis Tsipras for breaching his pre-election promises.

Lafazanis formed a new parliamentary group, Popular Unity, made up of 25 deputies, later joined by another 53 Syriza.

The economic cost of the new concessions to international creditors to the Greeks needs particular mention. Greece will receive an aid package totaling €86 billion, but the mode of external economic governance is being stepped up and the Troika will continue its regular monitoring of the Greek budget. An important new feature is that there will be a privatisation trust fund to finance Greek ‘aid’ containing Greece’s largest state assets to the tune of €50 billion, which will be handed to creditors should the country be unable to repay its debts in the future. These assets include largest banks – Alpha, Piraeus Bank and National Banko; gas importer and distributor DEPA; Helpe oil refinery; airports; and other infrastructure facilities. The government has already approved the sale of 14 of the country’s regional airports to the Germany company Fraport AG-Slentel Ltd.

In addition, Athens is obliged to continue its tax reforms, simplify its employee dismissal procedure, abolish early retirement, and liberalise its gas and pharmaceutical markets as well as its housing and utilities services. A number of measures harmful to the Greek economy such as increasing the VAT for tourism businesses on the islands were approved by the Greek parliament back in July.

In spite of Tsipras’ pre-elections promise, Europe has remained unchanged and the Troika has imposed new and savage austerity measures on Athens. Only Syriza has changed: the party has split in two.

* * *

Finding himself in a parliamentary minority, Tsipras decided to resign and go to early elections. The third national vote this year is tentatively scheduled to take place on 20 September.

It seems that Tsipras’ actions pursue two objectives. On the one hand he wants to break with the left wing of the Syriza party, which voted against the austerity programme in parliament. On the other, he wants to get a new mandate from the electorate before the new austerity programme is launched in Greece and the sale of state-owned assets begins.

Brussels has supported Tsipras’ decision to hold early elections and sees it as a possibility to strengthen support for the European Stability Mechanism aid programme, which Tsipras only recently signed on behalf of Greece.

The timing of the early elections seems to have been chosen well. The Greek people understand that the problem of its humiliating external dependence is not being resolved, although banks and cash machines are working again, and it produces a calming effect. Everyone would like to think that the worst is behind them.

But the public mood may change rapidly.

It is likely that those people who chanted, «We’ve had enough humiliation!» on the evening of the referendum may not vote for Tsipras, who himself has humiliated them. It is also possible that the elections will end in deadlock, where none of the parties gain a big enough majority to create a stable government.

The unpredictability of the whole course of social and political life in Greece is increasing with each passing day.

For the time being, the country’s helm is in the hands of its top Supreme Court judge, Vassiliki Thanou-Christophilou, who became caretaker prime minister – the country's first female PM. Her main objective is to form an interim government until elections take place in September.

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