By Neil Irwin, New York Times
When I was last in Greece, for a reporting trip in May 2012, Syriza, a political party whose name is an acronym for “coalition of the radical left,” had recorded shockingly strong results in a recent election. The centrist, mainstream sources I was meeting with — such as bankers and ex-politicians — were nervous about what Syriza supporters, whom they viewed as wackos, meant for their country.
It’s nearly three years later, and Syriza has now triumphed completely, taking charge of Greece’s government. And what is remarkable is how utterly calm the reaction is.
Greek stock and bond markets sold off sharply, but elsewhere in Europe markets were mostly up. The euro currency was actually up a bit against the dollar Monday. In newspapers across Europe, there is some tut-tutting about the leftists who will now run Greece, but hardly what you would call panic.
Alexis Tsipras addressed supporters in Athens on Sunday, after his left-wing Syriza party won a decisive victory in national elections.New Leader in Greece Now Faces CreditorsJAN. 26, 2015
Alexis Tsipras, Greece’s new prime minister, after his swearing in ceremony in Athens on Monday.Despite Initial Tremors, Markets Mostly Shake Off Greek Election ResultsJAN. 25, 2015
Alexis Tsipras, the new Greek prime minister, has spent the last few years building a reputation as something more than a radical agitator; he positioned Syriza to be a governing party rather than a protest party. He has met with financiers and government officials across Western Europe to build relationships. A version of his message to them is in this article he wrote for The Financial Times last week, arguing that a rejection of austerity policies was the best hope for keeping Greece as a stable European democracy. (Nothing says coalition of the radical left like publishing one’s manifesto in The Financial Times.)
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In Athens on Sunday, supporters of the leftist Syriza party cheered exit poll results indicating a victory. Syriza has promised to take on international lenders and roll back painful austerity measures imposed during years of economic crisis in Greece. Credit Milos Bicanski/Getty Images
In short, global markets and many European leaders are viewing Mr. Tsipras as less a firebrand radical and more a pragmatic dealmaker who just happens to have a starting negotiating position that is different from their own.
His position: that years of budget-cutting required by Greece’s bailout deals has created a humanitarian disaster, with vast unemployment and cuts to the social safety net leading to hunger and health crises. It is time, he argues, to renegotiate those deals, particularly now that Greece has reached the point of having a “primary surplus,” meaning that its budget is in balance excluding the costs of interest payments on old debt.
That’s important because it means the country could theoretically repudiate its debts while maintaining its current levels of taxing and spending. In practice, the panic that would come with debt repudiation, and a likely exit from the eurozone, would introduce a new source of economic downdraft for Greece that may make that action less realistic.
Besides, Mr. Tsipras has said repeatedly he wants Greece to remain part of the European Union. He wants to keep its deep connections with the rest of the continent and continue to use the euro currency. To do that, any restructuring of debt or reworking of austerity policies will have to happen through negotiations with international creditors, not through unilateral action by the Greek government.
That will constrain his ability to successfully play a game of chicken with the troika of the European Commission, European Central Bank and the International Monetary Fund. Expect a period of tricky brinkmanship as they try to hammer out a deal that gives Greece some relief without making other European governments feel the country is backtracking excessively from sustainable finances and policies.
But the thing that’s most striking about the elevation of this radical party to the helm of Greece’s government is that its core goals don’t seem very radical at all.
There are presumably many, many opinions that members of the Syriza coalition hold that most people in the United States or Western Europe would find objectionable or even scary; the group includes Maoists and Trotskyites and anarchists (Oh my!). And Mr. Tsipras will surely face challenges from within his own fractious coalition in keeping the core goals.
Perhaps more scary than anything Mr. Tsipras is proposing was the success of Golden Dawn, an anti-immigrant party with neo-Nazi leanings. It came in third in the Greek elections.
Greeks are living through what is, by any measure, a depression. Spain and Italy and Portugal are only somewhat better off. Members of Podemos, a Spanish leftist party with an anti-austerity message similar to that of Syriza, were close observers in Athens in the final days of the campaign and were reportedly inspired by the victory.
For years, the mismanagement of Europe’s economy by its leaders in Brussels, Frankfurt and Berlin has fueled discontent. The rise of parties that reject the received wisdom in these European centers is partly because they are untainted by the decisions that got Greece into this morass.
In other words, the real surprise is not that Greek leftists have been elected. The surprise is that it took this long.
