International Desk: Greek Elections July 8, 2019
By Lisa Boudet
A wind of change is about to blow over Greece. After four years of being governed by a coalition of left and far left parties, Greeks have decided to elect the opposition in the snap general election that took place on Sunday.
The Centre right party New Democracy scored 40 percent of the votes, ahead of previous governing party Syriza, which only reached 31 percent. The leader of New Democracy, Kyriakos Mitsotakis, was sworn in as Greece’s new Prime Minister.
Mitsotakis is ousting popular figure and now former Prime Minister Alexis Tsipras, who has been largely credited for driving Greece out of the colossal economic crisis it was engulfed in from 2009 onwards. His party Syriza, originally on the fringes of the political landscape, came to power in January 2015, amid a growing discontent of the population. Tsipras promised to end austerity policies then imposed by the European Union and the International Monetary Fund, the country’s bailout creditors.
It all started ten years ago, when Greece started feeling the effects of the global financial crisis of the years 2007/2008. The Greek economic crisis was mainly triggered by the dangerously high amount of sovereign debt, meaning the amount of money a country owes to creditors. In Greece’s case, the EU and the IMF. Basically, Greece spent more money than it made, and for a while borrowed, but that led its budget deficit to become more than 15 percent superior to the country’s GDP. As a point of comparison, member states of the European Union are supposedly required to keep their budget deficit below 3 percent of the GDP.
In 2010, Greece announced that it would most likely not be able to pay off its debts, hoping the EU would forget the debt, but at the same time threatening the viability of the Eurozone. To avoid that situation, the European Union and various private investors, lent money to Greece - a lot of it, about 320 billion euros - so it could continue making payments and avoid default.
But the bailout would come at a price: Greece would have to apply strict austerity measures. One of the harshest was a strict reform of the pension system, which meant retired Greeks would be given less, while working Greeks would contribute more. The second massive reform was the increase of a multitude of taxes, which led to an increase of the unemployment rate and a record high rate of youth unemployment of 60 percent. These measures were combined with a global lowering of wages, and Greece was also requested to sell a lot of its nationalised assets, which certainly cost money to run, but also constituted the only alternative in revenue to taxes.
In the following years, Greece’s economy both suffered and slightly recovered, but the austerity measures took their toll on the Greek people. And that’s when Alexis Tsipras and Syriza come in the limelight. Tsipras based his entire campaign against the drastic measures, and only 6 months into being Prime Minister, announced a referendum on austerity, promising a no vote would give his country more leverage in future negotiations. A majority of Greeks voted no, creating global fear and causing banks to cap the allowance on withdrawals.
Despite the no vote, the Greek parliament, with its Syriza majority, passed new austerity measures, and agreed to yet another bailout plan.
Some called it pragmatism, others preferred the word “treason”.. Zoe Konstantopoulou, former Syriza member who served as Speaker of the Hellenic Parliament, probably best embodies the disappointment that followed: for four years now, she has been very vocal against Tsipras and his reversal. When the referendum was passed in 2015, she refused follow her party’s directions and voted against further austerity measures. But Tsipras quickly dissolved the parliament, and she was ousted. The radical left in government took a fairly similar path to what would have been expected of a centrist or right wing party. Tsipras agreed to cut pensions, broaden the tax base, and privatise more companies.
Many supporters have become heavily disillusioned, and Syriza’s base in shrinking. The European Elections of last May were the first clear sign: the left wing coalition party only arrived second, ten points behind New Democracy, foreshadowing in retrospect Sunday’s election results, and forcing the snap election. But was it even a left wing coalition anymore? Tsipras ministerial cabinet is made out of politicians from a myriad of parties, including right wing and liberal. Tsipras gained praises from neoliberals throughout Europe, and is now far from the “populist” label he was given by the same people 5 years ago.
The bailout program ended on August 20th, 2018. It means Greece will not be given more money. But the country is not out of the crisis, and repayments spread out until August 2060. Greece still has the highest youth unemployment rate in the European Union, recorded at 40 percent in January this year. The global unemployment rate has slowly decreased, and Syriza recently boosted the minimum wage, but it seems too little, too late. The party campaigned on promises of tax relief for individuals and businesses, and the creation of half a million new jobs within four years. Not enough to convince voters.
Greeks offered their support to New Democracy, who promised a more drastic relief, with bigger tax cuts and bigger increase of wages. While the rest of Europe is experiencing a split in traditional politics and a massive rejection of the establishment in favor of fringe parties, Greece is doing the exact opposite. New Democracy leader, Kyriakos Mitsotakis, is the son of one of Greece’s former Prime Minister. He was educated at Harvard and Stanford universities, and did a brief stint as a financial analyst and consultant. The party itself is one of the two major parties of Greece’s modern history. It was in power between 2004 and 2009, then again in 2011, and actively took part in both the demise and the attempt at saving the country. But the election of New Democracy and the return of dynasty politics in Greece is seen as a return to normality in Greece, after a highly troubled decade.
Is the 2019 New Democracy different from that of ten years ago? As Syriza’s discourse was moving further towards the centre, to what New Democracy had advocated for so long, it had to find ways to stand out. It used the migrant crisis in Greece, and the decades-long conflict with the Republic of North Macedonia over the use of the name “Macedonia”, as points of difference, and it seemed to work. Because as much as the economic crisis, questions of nationalism and immigration have been at the heart of the recent Greek politics. And that’s where Greece turns out to be not so different from the rest of Europe, after all.