After years of painful belt-tightening, wage cuts and spiralling unemployment, Greek voters will be asked on Sunday to choose between more of the same and a leap into the unknown.
The unknown is left-wing party Syriza, a once radical leftist group that has toned down its rhetoric and policies as it draws closer to power.
Polls suggest the party – whose name stands for “Coalition of the Radical Left” – will come first in the January 25 vote, though whether it could form a majority by itself is still in dispute.
While Syriza has softened its sharp edges, it remains unpalatable to much of the EU establishment, which has been deploying the customary scare tactics ahead of the election.
Even before MPs failed to elect a new president last month, automatically triggering an election, senior European officials were urging Greeks to support the ruling coalition of conservatives and social democrats.
"I wouldn't like extreme forces to come to power. I would prefer if familiar faces show up," Jean-Claude Juncker, the head of the European Commission, told reporters ahead of the vote in parliament.
German Finance Minister Wolfgang Schauble, a key advocate of austerity, advised Greeks not to play with fire by electing politicians with unreasonable demands.
“Fresh elections won’t change Greece’s debt. Each new government must fulfill the contractual obligations of its predecessors. If Greece chooses another way, it’s going to be tough,” he said.
His Greek counterpart, Gikas Hardouvelis, warned that the European Central Bank (ECB) could “strangle the Greek economy in a split second” by cutting off life-support for the country’s cash-strapped banks.
Meanwhile, Christine Lagarde, the head of the International Monetary Fund, has reminded Greek voters that "a debt is a debt, and it is a contract", referring to the €320 billion Greece owes its creditors and which Syriza wants to cut by half.
Critics, as well as many in the media, routinely describe Syriza as “extreme” and “populist”, often comparing it to the extreme-right Golden Dawn party, a thuggish Neo-Nazi outfit whose leaders have been charged with forming a criminal gang.
Some have labelled Syriza “Europhobic” – which it patently is not.
Most repeat the oft-quoted mantra that, however appealing the left-wing party may sound, there is simply “no alternative” to austerity.
But Dimitris Mardas, a professor of economics at the Aristotle University of Thessaloniki, disagrees. “Of course there are alternatives,” he countered. “If not, what is the meaning of economic science?”
For Mardas, “the real question is whether Syriza’s alternative is the most efficient”.
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Its charismatic leader Alexis Tsipras has hailed the imminent “end of a regime that plunged Greece into poverty, unemployment, misery and despair".
Tsipras, 40, has vowed to “cancel austerity” and unilaterally shred the stringent conditions tied to Greece’s €240 billion bailouts by the so-called "troika" of the EU, ECB and IMF.
His party plans to raise salaries and pensions, end the job hemorrhage and halt the privatisation of state assets.
Contrary to what it proposed in 2012, when it was still only a fledgling party, Syriza no longer intends to wipe out the country’s €320 billion debt.
Instead, it wants to negotiate a write-off of half the amount with its EU partners, by far its largest creditors, while paying back the IMF.
In a bid to calm jittery markets, it has already ruled out a default on private debt. It has also ditched plans to quit the euro.
The party’s chief economic policymaker, John Milios, told the Associated Press on Saturday that a Syriza government would not run deficits and would pursue fiscal consolidation, but “in a way which places the burden on those who can pay”.
Milios said the left-wing party would boost growth through fiscal stimulus, targeted at lower incomes in order to boost their spending power, while avoiding “what happened in the past, such as over-indebtedness”.
“Syriza is visibly more moderate than two years ago, and will become even more so if it comes to power,” says Mardas. “But expectation is such that they cannot take too many steps back.”
Syriza's rapid rise from a motley group of leftist movements to becoming Greece's preeminent political force underscores the extent of popular anger after six years of recession and the severe belt-tightening imposed by the troika.
A former civil engineer, Tsipras was part of the so-called "700-euro generation" of Greek youths struggling to earn more than the country’s average salary.
As such, it is small wonder he disagrees with those who have blamed Greek largesse for the country's woes.
Syriza’s leader describes Greece’s plight as a “humanitarian catastrophe”.
The scale of devastation is indeed massive. Greece’s economy is 25% smaller than before the crisis, a quarter of the labour force – and half its young – are out of work, real wages have shrunk by a third, and industrial output has dropped by 35%.
Unicef says more than 40% of Greek children live below the poverty line – by far the highest rate in the developed world.
According to Philippe Légé, a French economist and keen observer of the Greek crisis, the troika’s “no alternative” rhetoric is an admission of weakness and, implicitly, of failure.
“The only way to defend an economic policy that has done severe damage to Greek society and healthcare, increased unemployment and pushed public debt up from 129% of GDP in 2009 to 175% today, is to claim that this disastrous policy is the only possible one,” he said.
Sword of Damocles
Should it win the election, the left-wing party will soon find itself in a race against time to repay €17 billion in debt due in 2015, while at the same time reversing budget cuts and ditching the planned sale of state companies.
Légé says dealing with the country’s unwieldy debt will be crucial to Syriza’s chances of offering an alternative to the status quo.
“If it wants to implement its programme and address the social crisis, a Syriza government cannot spend around 5% of GDP each year simply to service the interest on its debt,” he said.
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The French economist is among a growing number of experts who believe that restructuring Greece's debt is simply inevitable -- and indeed desirable.
“Whether or not Syriza wins the election, Greece’s public creditors will have to give up part of their claims,” he said, adding that "if Syriza wins, the terms of the restructuring will be better for the Greek people.”
But getting rid of this sword of Damocles is only part of the job, says Légé.
“Greece no longer has an industrial base and is hugely dependent on imports, meaning any debt restructuring will have to go hand in hand with a genuine policy of economic development,” he said.
Needless to say, both aims are likely to set the left-wing party on a collision course with Europe’s guardians of orthodoxy, who want Greece to implement further budget cuts in order to speed up debt repayment.
Judging by the rhetoric coming from the Syriza camp, its leaders are confident they can force Greece’s creditors to yield.
"We will beat the drum and they will dance, not the other way round," Tsipras told supporters at a rally in central Greece.
But analysts are less convinced that an inexperienced government at the helm of Europe’s weakest economy could somehow persuade the likes of German Chancellor Angela Merkel to perform a U-turn.
“Nobody really expects Syriza to tear up the bailout deals, but they will have to show they are trying hard to change them,” says Mardas.
He believes there is room to renegotiate parts of the so-called "memorandum" signed with the troika, “because even some of Greece’s creditors realize that the impact on the economy has not always been good”.
But there is only so much EU officials can agree to change without implicitly acknowledging they have flunked the response to the crisis.
“The dominant economic culture in Europe is different from that envisioned by Syriza,” cautioned Mardas. “And Greece is too small a country to reshape it.”
Syriza’s leaders have spoken of a “wind of change” sweeping across the continent, pointing to the rise of the left-wing “Podemos” movement in Spain, another country blighted by crisis and austerity.
Both were recently singled out as the only European parties currently backing "sensible policies such as debt restructuring" in a widely quoted article by the Financial Times, a newspaper that can hardly be accused of leftist sympathies.
"The tragedy of today’s eurozone is the sense of resignation with which the establishment parties of the centre-left and the centre-right are allowing Europe to drift into the economic equivalent of a nuclear winter," the article read.
If Syriza has its way on January 25, we may yet be looking at the start of a mid-winter thaw.
An earlier version of this article was published on the 31st of December.
Date created : 2014-12-31