Grexit? Brexit? Don’t bet on it.

As Clint Eastwood, in his eighth decade, celebrates the success of American Sniper some of his earlier films spring to mind – The Good, the Bad and the Ugly in particular. The old cliché “who’ll blink first” has never seemed more appropriate when it comes to Greece’s election this week-end as Merkel and Tsipras face each other across an empty high-street at sun-set with balls of tumble-weed blowing across the dusty plains of Greece’s economic landscape. If media speculation is to be believed a game of brinkmanship is playing out across the Ionian sea with creditors, regulators, governments and banks across the EU ready to pronounce either the beginning of the end for the euro or a renaissance of Europe’s currency once the results of the election are known late on Sunday evening.

All depends on Sunday’s shoot-out at the O.K. Corral and who’ll blink first – Merkel or Tsipras. Publicly, of course, both sides “deny” they are facing each other down. Merkel denies she is cold-shouldering the Greeks and is totally committed to Greece’s continued membership of the euro. For his part Tsipras has stated that he has no intention of risking Greece’s membership of the euro. So much for the official-speak – now for their real intentions.

According to Der Spiegel, (which seems to be the most in the know about German government thinking), “the prospect of a renewed crisis in Greece no longer triggers panic in Brussels, Berlin and other European capitals. Weariness and annoyance have become the dominant emotions. “Not Greece again,” groaned a leading Finance Ministry official last week after reviewing the situation with his colleagues in a telephone conference. ….. Tsipras, the official said, has little leverage.” It is not just Merkel that matters, however.

Reducing the debate to “Merkel” vs. a “Tsipras” is, of course, simplifying the situation to infantile levels. The bail-out was an agreement hammered-out by a troika of international institutions – the European Commission, the European Central Bank and the International Monetary Fund – each of which is going to have their say on whether a new Greek government can or can not re-negotiate the terms of their debt. For them it’s not just about easing austerity for the Greek population. The very credibility of the euro is at stake.

Add Christine Lagarde, head of the IMF, to the list of Syriza’s critics. Lagarde made it clear in Ireland this week: “Collective endeavours are welcome but at the same time a debt is a debt and it is a contract. Defaulting, restructuring, changing the terms has consequences on the signature and the confidence in the signature.” A sentiment echoed by the President of the European Commission, Jean-Claud Junkcer who made it clear “Europe will continue to support Greece, but it is expected that Athens will stick to the promises made to its partners.”

Nor, is there much sympathy for Greece from northern European tax-payers. Were the EU, IMF and ECB to write-off the debt to please Tsipras and keep Greece in the euro it will be seen as a subsidy on corruption, incompetence and weakness. Worse it will send a signal to other profligate countries to spend in the full knowledge that northern European tax-payers will prop-up the currency regardless of spending patterns. Were that to happen the euro will rapidly be worth less than the proverbial wall-paper decorating the living rooms of northern European houses.

Now for the Greek version. As far as they are concerned years of austerity have brought not just the Greek economy but the very fabric of Greek society to its knees. Austerity is destructive. Austerity is failing. Austerity is chocking the Greek economy and preventing it from recovering. There are serious and very real reports concerning the rise and rise of those unable to afford life’s basics: food, heating, housing and health care. Unemployment is at unsustainable levels and people are leaving Greece in their thousands desperate for work outside of their home-country. Little wonder then that the Greek electorate is turning their back on the old order and embracing the new in the form of the charismatic leader of Syriza, Alexis Tsipras. Further, Syriza’s Thessaloniki Programme looks like a kid’s Christmas wish list. Who wouldn’t want to vote for this party especially after years of misery and lack of hope?

  • Free electricityto 300.000 households currently under the poverty line up to 300 kWh per month per family; that is, 3.600 kWh per year. Total cost: €59,4 million.
  • Programme of meal subsidiesto 300.000 families without income. The implementation will take place via a public agency of coordination, in cooperation with the local authorities, the Church and solidarity organizations. Total cost: €756 million.
  • Programme of housing guarantee. The target is the provision of initially 30.000 apartments (30, 50, and 70 m²), by subsidizing rent at €3 per m². Total cost: €54 million.
  • Restitution of the Christmas bonus, as 13thpension, to 1.262.920 pensioners with a pension up to €700.Total cost: €543,06 million.
  • Free medical and pharmaceutical care for the uninsured unemployed. Total cost: €350 million.
  • Special public transport cardfor the long-term unemployed and those who are under the poverty line. Total cost: €120 million.
  • Repeal of the levelling of the special consumption tax on heating and automotive diesel.Bringing the starting price of heating fuel for households back to €0,90 per lt, instead of the current €1,20 per lt. Benefit is expected.

Tsipras looks like a breath of fresh air after years of misery. He is young. He is charismatic. He offers hope. He says all the things the Greek voter wants to hear. He is defiant and prepared to show the middle finger. Preaching moderation, caution and sticking to the terms of the bail-out agreement is political suicide in Greece. Suggesting that the bail-out is the best deal for the long-term future of Greece is akin to saying you are a mean, miserly bastard who has no sympathy or empathy for those suffering the worst affects of austerity. The Greek electorate want a Mr Money-Man to spirit their debt and misery away and in Tsipras the Greek electorate think they have found their Mr Money-Man.

But can Syriza deliver?

Is Tsipras a false prophet? Is he no different from those who went before him – promising the electorate the kind of public spending it simply can not afford? How can Tsipras hope that Greece can stay in the euro if he shreds the basic values that give the currency stature and credibility? How can he hope to bring the Greek economy back to competitiveness if he has no credit in international money markets (both literally and figuratively)? How can he hope to pay for all his reforms if no one is handing out the dosh? How can he really believe that Syriza can square the circle where his predecessors have failed? The answer is that Tsipras probably doesn’t believe his own rhetoric.

His message of tearing up the agreement is just a handy ploy to gain power at the expense of the incumbent, Mr Samaras. Who can blame him? The old parties that dominated Greek political life since Greece joined the EU in 1981 are totally discredited and dead in the dust. He is only doing what others would do in his place – exploit the vacuum. Perhaps better him than Golden Dawn? Tsipras is playing a political game. He knows he can not win an outright majority on Sunday. He knows he’ll have to form a coalition with more moderate parties who’ll urge him not to tear-up the bail-out agreement. Coalitions are great and legitimate excuses for failing to deliver on electoral promises.

At the end of the day Tsipras knows the best course for the Greek economy is an uninterrupted credit line from the troika. He knows that the Greek economy was beginning to perform better than expected at the end of 2014 in spite of (or because of?) austerity. So perhaps austerity does actually work? He knows that the vast majority of Greeks want to stay in the euro. Tsipras in an opportunist who’ll be happy to blink first once he’s in power. There’ll be no shoot-out at the O.K. Corral. As the German official noted in The Spiegel article “Tsipras has little leverage.” Tsipras may well be a political opportunist but there are other qualities to Tsipras that may yet be good for Greece.

He is, indeed, like a breath of fresh air after years of dusty, corrupt politicians that have gone before. Tsipras is more likely than any other candidate, to make every effort to stamp out public corruption, collect taxes and challenge the practically tax-free status of Greece’s oligarchs. Tsipras may not be able to shred the bail-out agreement but he does look like he has the stamina and stomach to shred corruption and enact many other much needed reforms. Should he come to power after Sunday’s election and should he be able to oversee a programme of tax reform, anti-corruption and stimulation of SME’s he’ll be in a much stronger position to re-negotiate the terms of the bail-out than he is at the moment. Grexit, like Brexit,has been hovering on the lips of commentators since 2010 – but don’t bet on it just yet regardless of what Syriza and UKIP, both protest parties, would have you believe.

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