Greek Parliament vote could bring back euro crisis as elections loom
ATHENS — The long-dormant euro crisis could come roaring back to life Monday with a vote in the Greek Parliament that is expected to bring down the pro-austerity government and open the way for a radical leftist party to take power for the first time in the history of the European Union.
The vote will be watched closely around the continent as a marker of economic peril in the year ahead as Europe gazes into the abyss of another recession. But it could also be a key political milestone as the center gives way to forces that were once relegated to the European fringe and are now buoyed by a populist, anti-austerity backlash.
For Greece, the expected collapse of the government comes just as the economy here had begun to stabilize. Now, with the far-left Syriza Party forecast to win the elections that would follow at the end of January, all bets are off.
The party has vowed to halt payment on Greece’s debt until the terms of the country’s $284 billion bailout agreements can be renegotiated, and it says it will thumb its nose at international lenders by ramping up public spending.
The prospect of a renewed clash with creditors has badly rattled financial markets and revived painful memories for some Greeks of a time in the not-so-distant past when their country flirted with ruin. Prime Minister Antonis Samaras warned over the weekend that a Syriza government could lead the nation to “bankruptcy and exit from the euro.”
But for others here — and in debt-ridden countries across southern Europe — the rise of the far left has kindled a once-faint hope that the continent can escape the chokehold of austerity.
Critics say that by relentlessly cutting the budget and attacking the deficit, the dominant European response to the financial crisis has left little room for growth and has kept unemployment at staggeringly high levels. Now, they say, it’s past time for an alternative.
“Europe is changing,” said George Stathakis, a Syriza member of Parliament and one of the party’s leading voices on economic policy. “Because of the fact that the European economy is the only one in the world that is doing this badly and has stuck to a growthless kind of situation, it’s become clear that things have to change.”
Stathakis pointed to emerging leftist groups in Spain, Italy and Portugal that share Syriza’s contempt for the European economic consensus and are prepared to join the party in pressuring authorities in Brussels and Berlin to change their tack.
But unlike those countries, Greece is no longer the master of its own fiscal destiny. Any shift away from austerity for Greece would require a high-stakes renegotiation with its bailout paymasters that analysts say could plunge Greece back into the depths of a debt crisis.
“We could be entering a process that leads to a point of no return,” said George Pagoulatos, a professor at the Athens University of Economics and a former government adviser. “There is no will among the Greek public or even among Syriza to exit the euro. But if they start playing hardball, speculation about a Greek exit will revive. And that’s dangerous because speculation can become a self-fulfilling prophesy.”
Syriza officials have declined to say what they will do if the so-called troika of international lenders — the European Commission, the European Central Bank and the International Monetary Fund — refuses to yield to the party’s demands.
Asked about Syriza’s fallback plan, Stathakis was unequivocal. “There is no plan B,” he said.
The prospect of a hard-line Syriza government going toe-to-toe with equally uncompromising European negotiators has prompted a sharp spike in Greek bond yields, even before the current government falls.
The trigger for the government’s ouster is likely to be a vote that was once viewed as a formality — the election of a new president. The job is largely ceremonial, but the vote has become a referendum on the center-right government, which came to office in 2012.
Samaras’s candidate, Stavros Dimas, has come up short in the first two rounds of balloting this month. If Dimas cannot garner 180 votes from the 300-member Parliament in Monday’s session — as most observers predict — new elections will be called for the end of January or the beginning of February.
Polls show that most Greeks don’t want new elections. But Syriza, which is leading the charge to bring down the government, is likely to be the biggest beneficiary. It has consistently held a lead of several points over Samaras’s New Democracy Party, with a smattering of smaller parties trailing well behind.
Syriza, a Greek acronym that stands for Coalition of the Radical Left, has risen rapidly, having emerged as a unified party only last year. Led by a combination of far-left activists, union organizers and university professors, it has lately moderated some of its stances, including its earlier threat to tear up the bailout and default on the nation’s debt. But the party still presents itself as an anti-establishment assault on Greece’s notoriously corrupt and insular brand of politics.
With 1 in 4 Greeks out of work and 1 in 3 living in poverty, it is no mystery why that approach has proved popular.
“It’s the only thing we have to hope for,” said 43-year-old Vivi Vlachou, a divorced mother of two teenagers who lost her job cleaning government offices under the bailout-imposed austerity policies. “We don’t expect Syriza to save the nation. We don’t expect everything to be perfect. We just want something different.”
To Vlachou, that means getting her job back — an $8-an-hour position that she once thought would be hers for life.
But to others, “something different” means a return to conditions earlier in the decade, when Greece was in free fall.
Dimitris Zafolias has watched his family’s century-old butter-and-cheese business shrivel from 26 employees across three locations to one employee at a modest Athens shop front. If Syriza thrusts the country back into crisis, Zafolias said, he’ll probably shut the whole thing down.
“Right now, Greece is like a turtle going step by step,” said the 70-year-old. “But the election would be very painful for the country and for my job.”
The election may be especially messy given the compressed time frame — just a month for campaigning, followed by a deadline for hammering out an agreement with international lenders that pops up only weeks later.
Antonis Papagiannidis, a veteran Greek journalist and analyst who thinks it’s more likely than not that Greece will leave the euro in the next two years, said Syriza will need allies if it wants to succeed in those negotiations. But the party may be hamstrung before it even starts by lingering resentment at home.
“They will have to corral wider support to negotiate with Europe and the IMF,” he said. “After an ugly campaign, that will be very difficult.”