“If Syriza wants to obtain a better deal from Greece’s lenders, it will have to offer something in return”

A man walks past a pre-election poster of the Democratic Alliance party at a bus station in Athens<p>A man walks past a pre-election poster of the Democratic Alliance party at a bus station in Athens</p>

Question: What happened today was no surprise, this outcome was already on everybody’s mind, wasn’t it?

Answer: Yes, it was clear from the first round that the goverment would struggle to get the 180 votes needed by the final ballot. In fact, it had been a cause for concern in the government for some months that it would not be able to elect a president because of the stance adopted by opposition parties who wanted to trigger snap elections. Saying that, there was almost no attempt from Samaras to find common ground before the vote. When he did make an offer of compromise, it was too little, too late.

Q: Your country is going to the polls on January 25. In your opinion, can your Greek fellows vote Syriza to punish the rest?

A: There are several reasons for which Greeks might vote for SYRIZA. One is what you mention – the rejection of the established political system. This anger has also fed other parties, most notably Golden Dawn. However, Greeks have also been attracted to SYRIZA because it has adopted a more voter-friendly approach, promising better wages and pensions as well as jobs in the public sector. Finally, there are those who genuinely believe that Greece needs to seek a new kind of agreement with the eurozone and that the single currency as a whole cannot operate unless there is a radical restructuring of debt and completely different approach to driving the economy.

Q: Even if everything went by the book, the Athens bourse fell to a two-year low, dropping almost 11% at some point. Greece’s benchmark government borrowing costs rose to a year high of 9.6% and the three year bond yield rising 11.7%. How much further pain can this inflict to the Greek economy?

A: Greece’s stock and bond markets are very shallow, meaning that the movement of a few investors can cause a big fluctuation. Saying that, it is a clear sign of the concern among investors about what happens next in Greece. The bond yields are of particular interest to whoever wishes to govern the country as they underline that borrowing from the markets without the support of the eurozone will be next to impossible, at least in the short-term.

Q: Everybody is wondering about Greek debt. What kind of arrangement could Syriza make with Brussels about the bailout and the precautionary line?

A: This is one of the major questions that a SYRIZA government would have to answer. It wants to end the bailout but at the same time Greece’s debt obligations and its lack of access to funding mean that the numbers simply do not add up if there is no support from the eurozone. Beyond that, if SYRIZA wants to obtain a better deal from Greece’s lenders, it will have to offer something in return. The leftist party insists that this cannot be supply side reforms as it believes enough has already been done. If it offers structural reforms that would clean up Greek politics, improve tax collection and make the public administration more efficient, I have a feeling that the eurozone might be prepared to listen to what SYRIZA has to say. So far, though, Tsipras’s party has not focussed on these areas enough and there are doubts about whether it has any genuine commitment to do so.

Q: Syriza’s Alexis Tsipras and Spanish Podemos’ Pablo Iglesias have been exchanging encouraging tweets. Both are positioning themselves as those who will end up with “looters” and the political chaste who have inflicted austerity and pain to the population. In Spain, Mr Iglesias has been critizised for making a good diagnose but not bringing any plausible solutions on the table. Is that happening to Tsipras?  

A: This has been one of SYRIZA’s weak points. It has been unable to convince Greek voters that it has a plausible alternative. A recent poll indicated that only 18.3 percent of Greeks who say they will vote for SYRIZA “truly trust” the party. If the leftists had produced a compelling message, they would have been preparing for a landslide victory on January 25, instead of struggling to get a parliamentary majority. In SYRIZA’s case, the idea of asking for debt relief and wanting to stimulate demand is a logical. But it needs a framework around this, including what kind of structural reforms would be carried out to ensure the extra demand does not simply help imports and where the money would from to follow a more relaxed fiscal policy. Perhaps, though, in the case of SYRIZA and Podemos we are still in the early days.

About the Author

Ana Fuentes
Ana Fuentes is The Corner Editor-in-Chief. Currently based in Madrid, she has been a correspondent in New York, Beijing and Paris for several international media outlets such as Prisa Radio, Radio Netherlands or CNN en español. Ana holds a degree in Journalism from the Complutense University in Madrid and the Sorbonne University in Paris, and a Masters in Journalism from Spanish newspaper El País. You can contact her at: anaf[at]thecorner.eu

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