Opinions
Progressive Futures

Greece’s first post-bailout government

24 July 2019

As politics across Europe continues to fragment, politics in Greece is starting to consolidate around a renewed two-party system

Authors
Othon Anastasakis
Author
Shutterstock

And so, the first post-bailout government in Greece has come into being following the elections on the 7 July 2019, with a clear majority in parliament, and a mandate for change, for the centre-right New Democracy (Νέα Δημοκρατία/Nea Dimokratia) party. With a comfortable majority of 158 out of 300 MPs, New Democracy is expected to have uninterrupted four-year term, which would follow from the previous four-year term of SYRIZA (ΣΥΡΙΖΑ). While this is a positive sign of democratic continuity and stability in Greece in the aftermath of the economic crisis, the dissimilarities between the previous and the current government could not be starker.

To start with, the charismatic, politically self-made, and populist personality of former Prime Mininster Alexis Tsipras contrasts sharply with his successor Kyriakos Mitsotakis, a more pragmatic, less captivating figure, and member of a well-known Greek political family. The previous SYRIZA government was composed mostly of left-wing ideologues, while the newly appointed New Democracy government is economically liberal and includes a number of technocrats from across a wide centre-right and centre-left spectrum. The recent election sees national politics in Greece shifting from a rather emotive and often casual style of governance under SYRIZA, to a seemingly targets-based style of political operation under New Democracy. Meanwhile, the egalitarian approach of SYRIZA is now replaced by the more elitist attitude to education and politics of New Democracy, and, last but not least, a strong majority government will take over from the previously fragile coalition government between SYRIZA and the right-wing Independent Greeks (Ανεξάρτητοι Έλληνες/ANEL).

At the level of ideas and policies, the differences are also remarkable. The new government’s prioritisation of tax cuts, reduced bureaucracy and support for the middle classes is the total opposite of the previous government’s prioritisation of rising taxation, support for the disadvantaged lower echelons of society, and a strong statist mentality. The new government has promised to deliver an unashamedly liberal economic programme to tackle future macro-economic challenges. They have pledged to cut government spending, boost investment, and create the conditions to attract some of the (mostly young) half a million Greek migrants that were lost to the brain drain since the economic crisis was unleashed in 2009. The new government is also planning to transform the field of education by terminating, among others, the “University asylum”, a system which forbids the police to enter university campuses, on the grounds of protecting academic freedom. While revered by the government of SYRIZA, this ‘asylum’ was abused by extremists and criminals who operated freely in some campuses. New Democracy also plans to step up internal security by cracking down on radical left-wing terrorism which utilised violence in some parts of Athens city centre, including Exarcheia, and which was ineffectively addressed by the SYRIZA government.

Over the last 10 years of crisis, reforms for Greece were dictated from abroad and were set out in the strict terms and conditions of the successive bailout agreements reached with the country’s creditors of the EU, ECB and IMF Troika in 2010, 2012 and 2015. Three consecutive governments were forced to adopt the bailout reforms, albeit reluctantly, and despite a very high political, economic and social cost. ‘Officially’ free from its bailout conditions, following the end of Greece’s third memorandum in 2018, the New Democracy government operates within an environment of some growth, albeit slow, as well as some encouraging international economic conditions, including sustained growth in Europe and low interest rates. All this affords the Mitsotakis government some room for manoeuvre to set its own priorities and to achieve some of its goals.

Having said that, the government is also burdened by unpopular and controversial legacies from the distant and not so distant past. The former refers to the long-term pathologies of the Greek political system that were not remedied by the crisis-led reforms. Indeed, in some cases, some of these problems became more resilient as a defence mechanism against the negative repercussions of the depression years. As such, petty corruption, tax evasion and cumbersome bureaucracy are perennial and inter-connected issues, courtesy of the two-party system which dominated Greece from the 1980s onwards, with New Democracy representing one pole, and the centre-left Panhellenic Socialist Movement (Πανελλήνιο Σοσιαλιστικό Κίνημα, or PASOK/ΠΑΣΟΚ) representing the other. More recently, a big share of the blame for the country’s irresponsible public debt and high public deficit which devastated the country during the economic crisis, lies with New Democracy’s two terms in power during the years before 2009. On these fronts, the government has to fight with the demons within the history of its own party.

Today, New Democracy faces into a national economic environment which includes high debt-servicing charges, an obligation to maintaining high annual primary budget surpluses, the highest unemployment rate in Europe at 18%, stubbornly slow growth rates that cannot make up for the massive loss of 25% of national GDP experienced during the decade of depression from 2008, a banking sector that is stuffed with non-performing loans, and a public exhausted and injured from a decade of austerity. While it is positive that no one is contemplating ‘Grexit’ from the eurozone anymore, the new Greek government will have to do a lot of work to prove itself in the international markets and to consolidate trust with its eurozone partners.

 

In the end, the recent elections have created a new bipartisan system dominated by New Democracy and SYRIZA, the latter having absorbed a very large part of the once powerful centre-left PASOK. SYRIZA are now set to become the new political agent of Greece’s once powerful social democratic tradition on the domestic and European scene. One important rupture with the recent past, is the electoral marginalisation and near-exclusion of extreme formations from Greece’s political landscape which is a victory for the Greek party system in general, following the rejection of the neo-nazi Golden Dawn party (Χρυσή Αυγή/Chrysí Avgí), who failed to reach the 3% threshold to enter parliament. Moreover, the fact that the recent pre-electoral campaign avoided resorting to polarisation and fanaticism, indicates the lack of appetite for divisiveness and populism in Greek politics. This in itself shows a public desire for moderate forces to take responsibility for rebuilding the country, after a long period of abnormality and turmoil.

Thus, as politics across Europe continues to fragment amid the rise of populist, nationalist and challenger parties, politics in Greece is starting to consolidate around a renewed two-party system. For the country that experienced the most devastating fallout of the post 2008 crisis, this return to something resembling political normality is quite remarkable.

Authors

Warning: count(): Parameter must be an array or an object that implements Countable in /home/policyne/public_html/wp-content/themes/Policy Network/inc/article/more.php on line 4