New government risks undercutting ties with Europe and the US
Greece has never been a leader in Europe’s power institutions — NATO and the European Union. German, French, and British leaders alike considered it too small, poor, and geographically remote to be a major player. But all that changed with Sunday’s landslide victory of the radical left-wing Syriza party in the most important Greek national election in four decades.
By Monday, Syriza’s young, strong-willed leader, Alexis Tsipras, had been sworn in as prime minister. Within hours, his new government challenged the EU to renegotiate the terms of Greece’s massive bailout package. Tsipras then threatened to block stronger EU sanctions against Russia over Ukraine. Suddenly, a new and very different government in Athens is back on the radar screen of Berlin, Paris, and London.
Syriza’s victory was not surprising. Greece has suffered a calamitous economic depression with a massive loss in output, youth unemployment near 50 percent, and little capital investment. Six years of crisis have rocked the country and reshaped its politics. When the Greek economy was on the ropes in 2010, Athens appealed to the European Union, European Central Bank, and the International Monetary Fund for a massive bailout totaling over 240 billion euro to avoid bankruptcy. In return, the creditors demanded fundamental budget, fiscal, and legal reforms to fix Greece’s notoriously lax and profligate spending habits. That was the deal — the Europeans would save the Greek economy in return for tough, even brutal, economic reforms. Greece was rescued from default on its massive debt and from being booted from the eurozone. But the Draconian budget cuts and resulting loss of jobs infuriated millions of Greeks, who eventually lost confidence in the EU and their own government.
Syriza told Greek voters it would demand a fundamental renegotiation of the EU package and return to a major public spending program to create jobs and stimulate growth. It has made a big bet that by threatening to walk away, the Europeans will blink first. The stage is thus set for a looming collision between two immoveable forces — the stolid German attachment to austerity against Greece’s new, left-wing governing ideology.
German Chancellor Angela Merkel and other European leaders are unlikely to approve a more generous write-off of Greek debt that might encourage other European countries with rising populist parties, such as Spain, to ask for similar treatment. Merkel and German Finance Minister Wolfgang Schauble are also determined to defend the principle that Greece should honor its commitments to repay its debt. They’ve upped the ante by hinting publicly that the EU could weather the withdrawal of Greece from the eurozone itself if it came to that. The best deal Greece may get is an extension of the repayments but not a fundamental renegotiation of its debt.
Greece instigated a second crisis this week with Europe and the United States by threatening to block new EU sanctions against Russia in opposition to its escalating military intervention in Eastern Ukraine. Many of the new Greek cabinet ministers have been outright apologists for Russian aggression in Ukraine. Given the stakes involved, the EU and United States will put substantial pressure on Greece to back off.
In just four days, the new Greek government, which includes former communists and anarchists, seems determined to defy principles that are at the heart of what the EU and NATO stand for — play by the rules, keep your commitments, and defend democracy against aggression. They might relent, as neophyte ideologues sometimes do when faced with the reality of governing. But if Tsipras continues to drive his government hard left, he risks undercutting his ties with Europe and the United States for years to come. That would not be a smart choice. But he and his party don’t seem inclined to back down just yet.