A Greek Election that Should Strengthen Tsipras's Hand
For the third time this year, Greek voters will be going the polls, this time to elect a new Parliament on September 20 in the wake of the €86 billion bailout accord with European creditors and Prime Minister Alexis Tsipras's resignation. But the most likely outcome for this election will be to strengthen Tsipras's hand in carrying out the tough terms of the bailout. While some political uncertainty always surrounds elections in countries in economic crisis, these elections are most likely to provide political continuity, return Tsipras to power, and help put the country on a path toward a stable economic recovery.
Holding elections right after the crucial payment to Greece by the European Central Bank (ECB) on August 20, Tsipras will face voters when the darks days of July are still fresh in their minds but before they feel the full economic effects of the austerity measures dictated by the bailout agreement. The timing also gives less than a month for the left-wing rebels inside Tsipras's ruling Syriza coalition to break away and form their new anti-austerity party. The Syriza rebels' difficulties are compounded by an already crowded political space on the radical left of the political spectrum. Squeezed between the persistently anti-Europe and anti-euro Greek Communist Party on the left and Tsipras's new more centrist Syriza on the right, some potential rebels may have second thoughts and stay in the fold. The inevitable breakup of Syriza could become a Goldilocks-split—big enough for the utopian communists to leave but small enough to ensure that the rump party remains the largest in Parliament. The fact that only 25 percent of parliament members voted against the government line in the latest austerity package and only 25 Syriza parliament members—1/6 of the total 149—have now joined the new Popular Unity Party certainly suggests that rebel spirits are not widespread.. Tsipras is on his way to getting 30 percent of votes in this election, turning Syriza into a center-left party that could dominate Greek politics for the foreseeable future.
The first European Stability Mechanism (ESM) review of Greece's progress in carrying out its program is scheduled for October, but it is likely to be postponed, providing time for Tsipras to ask for backing from Greek voters to secure maximum debt relief from Greece's creditors. His high personal approval ratings make it likely he will succeed. By dangling promised debt relief before voters, he is in a good position to challenge opponents on the left to present an alternative strategy to achieve that result. Knowing that most Greeks oppose leaving the euro, the defectors on the left will have trouble articulating a more successful strategy. It is indeed ironic that Alexis Tsipras's political maneuver will force his Syriza rebels to present the credible alternative path that he himself was unable to articulate when leading Syriza on its original electoral platform of early 2015 of merely ending austerity and reform. Tsipras will essentially be asking his left-wing opponents the same questions former Prime Minister Antonis Samaras once asked him.
A similar quandary faces the main Greek opposition party New Democracy (ND), which is Syriza's only real rival to become the biggest party and receive the additional 50 bonus allotment of members that goes to the party that finishes with the most votes. ND is still led by Evangelos Meimarakis, a stopgap interim leader without charisma and lacking any independent political platform, who was thrust into power following Samaras's resignation after the referendum defeat (for ND) in early July. Much would need to go wrong for Tsipras not to receive the 50 extra seats in the new Parliament.
The delay of the first review of the ESM program is not likely to upset euro area members. Politicians all, these leaders recognize the need for Tsipras to seek a renewed mandate following his huge policy U-turns. With the first very large tranche of €26 billion already under way for Greece, the ESM program is moreover structured (perhaps intentionally) in a manner so that no immediate financial risks for Greece will emerge from a slight delay for the first program review.
In fact, euro area leaders need Tsipras, rather than the mainstream opposition, to win, completing the transformation of Syriza and its leader into a more malleable mainstream center-left party in Europe. The euro area would thereby prove that its political framework can withstand the populist challenge from their own far-left and far-right extremes. With Tsipras as the best guarantor for implementing the new program, mainstream opposition support can be taken for granted in Greece. Only Tsipras can deliver a two-thirds vote in Parliament for the economic overhaul that Greece needs. Like Richard Nixon going to China, Tsipras, the one-time pariah of the European project, can lead the way to keeping Europe whole in the future.