You’ll have noticed the electoral shockwaves coming out of Greece in the past couple of weeks, and big shockwaves they are, with the election of the first radical left political party in the history of the EU. Syriza received 36.3% of the votes, causing mass celebrations from supporters all across Greece and, perhaps most gratifyingly, a congratulatory Tweet from Hugh Laurie.
For many Greeks, the changes that Syriza offer are long overdue. Gender equality, LGBT rights and an end to police brutality. Perhaps, though, the changes that will have the greatest effect on the Greek people, and the people of Europe, are Syriza’s rejection of austerity policies imposed by the European Central Bank, the IMF and the European Commission. Syzira’s electoral win signals the failure of the country’s austerity driven economic strategy, with the party’s young leader, Alexis Tsipras, set to become the first Eurozone leader to reject austerity measures put in place to pay back a staggering £180bn EU bailout loan.
Whilst the effect of the changes for Greece will clearly be significant, it would be naïve to ignore the effect these changes will have on the rest of Europe.
With good reason, the European political forces are concerned by Syriza’s success. Prime Minister David Cameron took to Twitter to vent: “the Greek election will increase economic uncertainty across Europe. That’s why the UK must stick to our plan, delivering security at home”. Similarly, the chief of the German Central Bank Jens Weidmann noted that “it is clear that Greece will remain dependent on support and it’s also clear that this aid will be provided only when it is in an aid programme”. Essentially, Weidmann is suggesting that Greece is still under the economic control of Europe, regardless of Syriza’s best wishes.
It’s unlikely though that any of the semantics will affect Tsipras, who ran a campaign and won his mandate on a platform of using the threats made by European leaders in his favour. In the past week, Tsipras sat down in Brussels with all the European heavyweights, including Cameron and Merkel, to discuss his plans for the future of Greece. With a clear mandate and a fresh victory in his pocket, he should be able to put aside any suggestion of further austerity for Greece.
Contrary to the idea that Tsipras’ calls for an end to austerity are just angry rhetoric filled with misinformation, Stavros Drakopolous, along with many other economists, suggests that “most economists agree that the level of Greek debt is unsustainable and needs some form of renegotiation… The huge amount of debt hampers and drags on long-term economic growth that will bring a reduction in unemployment and an increase in per capita income. The need to provide debt relief, which is very likely to bring economic relief, is in the interest of the EU too”.
If the suggestion that a reduction in Greece’s debt repayments will be in the EU’s interests, then what effect will Syriza’s victory have on the other struggling european economies of Spain, Italy and Ireland? Pablo Iglesias, leader of the Podemos movement in Spain, joined Tsipras at a Syriza rally in Athens, praising the road to change that Syriza’s victory has forged across Europe. Politicans in Ireland and Italy have also praised Tsipras’ success. Matt Carthy, an MEP in Ireland, noted that victory for Syriza could improve Ireland’s chance of obtaining a better debt deal from the EU.
There can be no doubt, therefore, Alexis Tsipras’ success in leading Syriza to victory in Greece will lead to sweeping social, and economic changes across Greece. The biggest changes, though, will be the way other bailout nations will deal with austerity in the future. Yes, it may be true to say that if you receive a loan, you should pay it back, but if it’s detrimental to a nation, and arguably the EU, then at least renegotiate the terms, much like the 1953 London Agreement, where German debt from before World War II was written off to stimulate economic growth. Germany are now the largest economy in the EU, so if the strategy clearly works, why not apply it to Greece?