Is Berlin prepared for a new government in Greece?

Jens Bastian via Macropolis | The formal process of dissolving Parliament and setting in motion early elections in Greece was completed at the beginning of June*. Attention can now turn to the campaign across the country. The twists and turns of policy promises being made and speculation about personnel matters will be closely followed in other European capitals and inserted in diplomatic cables sent from Athens.

We therefore ask what policy makers and commentators in Berlin expect from the outcome of the ballot in Greece? Is there a preference for either candidate, the current prime minister Alexis Tsipras from SYRIZA or the leader of the largest opposition party, Kyriakos Mitsotakis from New Democracy (ND)? What policy challenges will the next prime minister residing in the Maximos Mansion in Athens have to address vis-à-vis his counterpart in Berlin?

The German government’s view of the candidates for prime minister ahead of Greece’s early elections on July 7 is rather ambiguous. This is largely due to the fact that PM Tsipras has undergone a remarkable political transition in office. His efforts at staging various policy U-turns over the course of the past four years have led to an impressive reassessment in Berlin of his term as Greek prime minister.

In federal ministries and across editorial offices in Berlin, Tsipras is seen as the most reliable “delivery boy” in Greece during the past decade. He has earned a revered status in most parts of the German media and among political parties, some of which are ideologically diametrically opposed to Syriza.

His initial nemesis in the Chancellery in Berlin now regularly praises Tsipras for his capacity to comply with most of the policy requirements in the third Memorandum, his willingness to cooperate with Germany in the refugee and migration challenges of 2015-16 as well as the PM’s determination to bring to a successful conclusion to the 27-year old name dispute with neighbouring North Macedonia. In summary, PM Tsipras has left his mark on Berlin. This impression could not have been expected following his disastrous start in the first six months of 2015.

This sense of appreciation, in some cases even admiration for the Greek PM creates a policy conundrum for the leader of the opposition. The accolades Tsipras has received stand in sharp contrast to the political reservations that continue to exist in Berlin vis-à-vis the largest Greek opposition party. While Mr. Mitsotakis is respected as a capable former minister, he is also an unknown quantity for many policymakers and commentators in Germany.

While ND and the senior coalition party in the German government – the Christian Democratic Union (CDU) – appear ideologically affiliated, this conservative perspective has not fostered a familiarity with each other. It was Chancellor Angela Merkel that rebuked Mitsotakis in a meeting this January, urging him to reconsider his hardline opposition to the Prespes Agreement between Athens and Skopje. A month later, the new leader of the CDU and successor to Angela Merkel, Annegret Kramp-Karrenbauer reiterated such disagreements with ND on the sidelines of the European Conference in Munich.

It is not forgotten in the hallways of government in Berlin that New Democracy has a number of political skeletons in the closet. First and foremost, this concerns the reluctance of ND representatives to publicly acknowledge their responsibility for the fiscal disaster they created when in government from 2004-2009, including the falsification of statistical data on the true state of the budget to the European Commission in Brussels. Moreover, various German ministers and political commentators have repeatedly expressed their irritation with the fact that leading members of ND have refused to condemn the prosecution and, ultimately, conviction of the former chief of ELSTAT, Andreas Georgiou.

Some observers in Germany may therefore regret to see Mr. Tsipras leave office should he – as is widely expected – lose the elections in three weeks. Mitsotakis will have his work cut out to upgrade his political capital vis-à-vis representatives in Berlin. His choice of finance minister will be closely followed. How he addresses the recent calls by President Prokopis Pavlopoulos and Tsipras for talks with Germany over Greece’s claim for Second World War reparations will impact on bilateral relations. It should not be forgotten that MPs from ND supported the government’s demand for reparations based on a recommendation from a parliamentary committee in Athens.

From a German perspective, the key policy tools that the new prime minister in Athens needs to apply are predictability and reliability. If the next PM can keep Greece out of any negative headlines and not become a recurring item on the agenda of cabinet meetings or editorials in Berlin, then much will already have been achieved. The fatigue factor in having to deal with Greece again should not be underestimated in Athens and among ND representatives eagerly preparing for electoral victory and ministerial office.

But the anticipated change of the guards in Athens could just as quickly be followed by the collapse of the coalition government in Berlin. Speculation about the termination of the Grand Coalition between the CDU and the SPD (Social Democrats) continues to mount. Uncertainty about who leaders will be doing business with in Athens and Berlin in the coming months could easily become a common policy challenge for Greece and Germany. The outcome of the July 7 elections in Greece could bring some welcome clarity. But the political theatre being staged in Berlin is of such a magnitude that the next Greek prime minister may only know after the summer break who he will be shaking hands with in the Chancellery when making his inaugural visit to Germany.

 

*Note by the editor: In the original text, the author mentioned it was on the 12th of June.

**Jens Bastian is an independent economic analyst and financial sector consultant, based in Athens, Greece