Greece's leftist fairytale gone bad
Jan. 25, 2015 in Athens: History was made when the radical-left political party Syriza (Coalition of the Radical Left) won the Greek Parliamentary election, becoming the first anti-capitalist party in recent European history. Alexis Tsipras, the 40-year-old leader of Syriza, beat Conservative Nea Dimokratia (New Democracy) incumbent Antonis Samaras by securing 149 seats in the Greek Parliament. As a majority of 151 parliamentary seats is required to form a government in Greece, Syriza formed a coalition with a small right-wing populist and Eurosceptic party called ANEL (Independent Greeks), securing a total of 162 parliamentary seats. Syriza’s victory sent shock waves not only in Greece, but also across Europe.
One of the pre-election promises of the leftist party was to renegotiate Greece’s tremendous debt as well as the austerity measures imposed by Greece’s creditors, the Europe Commission, the European Central Bank and the International Monetary Fund – the so-called “Troika” which are believed to have caused Greece’s deepening recession. New Greek Minister of Finance Yanis Varoufakis, a self-styled Marxist economics professor, lead the negotiations to extend payment deadlines with Greece’s creditors. However, Varoufakis’s arrogant behavior outraged European leaders and IMF officials. In addition, with national election approaching in Spain and Portugal, where elements of populism and the radical left started to surge, many European leftists wanted to see the new Greek government overturn the austerity programs imposed on European States.
Meanwhile, the situation in Athens deteriorated. Five days before a large loan payment was due by Greece, the leftist government declared the creditors’ proposed reform agenda and austerity measures as “unviable.” On June 26, 2015, Greek Prime Minister Tsipras called for a hasty national referendum on whether or not to accept the terms of the creditors. Three days after the referendum was proposed, all Greek banks closed, with civilians not being able to withdraw any money from their bank accounts. Credit and debit cards linked to Greek banks were also blocked, leaving Greeks traveling abroad stranded.
The referendum was one of the most divisive moments in modern Greek history. The “Yes” vote was supported by Greek political parties near the center, such as Nea Democatia, and even the democratic-socialist party PASOK. The “No” vote was supported by the Syriza-ANEL government radical elements like the Greek Communist Party and a neo-Nazi party, Golden Dawn. The referendum took place on July 5, 2015, and the “No” vote prevailed by more than 60 percent.
As a result of the vote, relations between Greece and the Troika deteriorated even more. Both the EU and the Greek Government started renegotiating terms of a new bailout for Greece in order to prevent the disaster that would arise by a potential Grexit (the departure of Greece from the Euro or from the EU). The leftist Greek Government capitulated and a deal was reached in the early morning with a bailout package containing even harsher terms than those proposed by the EU before the referendum. The new agreement outraged radical elements within the Syriza party, many of whom left Syriza and created a new party, Popular Unity, which advocated the complete departure of Greece from the EU and the Euro.
Faced with turmoil within his own party but also within the Country, Greek Prime Minister Tsipras resigned and called once again for elections, which were held on September 20, 2016. Tsipras and the Syriza Party won for a second time with 35.5 percent of the and again formed a coalition government with the ANEL party.
Today, things have not been much better for Greece. The actions of the radical left government, the austerity measures proposed by the Troika, and the ongoing refugee crisis, have all been burdens to the Greek people. The unemployment rate has skyrocketed to over 23 percent, especially among the youth where it has passed the 50 percent mark. Some of Greece’s brightest minds are abandoning Greece and are looking for a better future abroad. Taxation rates are around 24 percent on goods and services, while income taxes range from 22 percent to 54 percent, only making matters worse, limiting investment and increasing tax evasion. Social services have also deteriorated.
Some estimate that it will to take anywhere from five to 15 years for Greece to recover. In order for Greece to start on the path of recovery, the first step is to get rid of the Syriza government. There is a ray of hope. Recent polls show that if parliamentary elections were held today in Greece, Nea Democtratia, the center-right party, and its charismatic new leader Kyriakos Mitsotakis, would win by a large margin. The next scheduled Greek parliamentary election is in 2019, but there is always a chance that elections will be held much earlier. Since 2004, Greece has had six different governments in less than 12 years. No Greek government has lasted it full term in office. As for the Syriza government, its popularity has waned dramatically as the promises that it made to the Greek citizens were not kept. In fact, the government did exactly the opposite of what it had promised. Less than two years in power, and the leftist fairytale has gone bad.