Actually, it’s Greece’s Election

ATHENS—To hear the leaders of the European austerity party and a lot of commentators tell it, the upcoming Greek election will be a “referendum” between keeping Greece’s austerity commitments and staying in the Eurozone—or recklessly walking away. A vote for a centrist coalition, supposedly, is a vote for staying in; a vote for the left is a vote for throwing caution to the winds and destroying Greece.

But viewed from Greece, that framing is totally wrong.

The leftist Syriza party, actually a coalition of 12 (!) parties, substantially displaced social-democratic PASOK as the radical party in the deadlocked May 6 election, where no governing coalition could be formed. In the do-over election scheduled for June 17, Syriza is could well come in first with at least 25 percent of the vote. Under Greek law, where the top performing party gets a bonus of 50 seats in parliament, that should be enough to give Syriza in coalition with a couple of smaller parties a governing majority.

In the last campaign, when all sides were posturing, Syriza vowed to simply disown the austerity program imposed by the European Union. That program, intended to reduce Greece’s budget deficit, has actually increased it by destroying economic growth.

Unemployment is upwards of 20 percent, wages have been cut by as much as 40 percent, and there is widespread suffering among people who had nothing to do with whether leaders, three governments ago, falsified budgetary numbers. Greek GDP will fall by more than 20 percent over three years.

My conversations with Syriza leaders, however, suggest that the left party could take a very different tone in the upcoming campaign. Its chief, the charismatic Alexis Tsipras, has already said that he wants Greece to stay in the eurozone. He proposes much tougher negotiations with the IMF, the European Central Bank, and the European Commission to relieve Greece’s needless pain and get the country back on a growth path. There are others within the Syriza coalition who want an even more radical stance, however, and this coming week the final platform will be resolved.

My sources suggest that this debate has a better than even chance of being resolved in favor of Tsipras’ view, since there is growing recognition even on the left that Syriza needs to be more than just a protest party; it needs to be convincing in its audition for the role of governing party.

If that happens, the Greek election will not be a referendum between staying in or quitting the eurozone. It will be a choice between one leader promising very tough renegotiation, and a team of rivals—the center left PASOK and the center-right New Democracy—promising more moderate renegotiation. If that’s the framing, toughness wins. Ordinary Greeks are sick of what’s being imposed on their country.

But it’s even more complicated. PASOK, under Prime Minister George Papandreou, took office in 2009, promising wide reforms of a corrupt, top-heavy state. “As socialists,” Papandreou said, “we need government to work.”

His government made a good start. Then in early 2010, speculators began attacking Greek government bonds, and the European Commission and Central Bank spurred on by German Chancellor Angela Merkel demanded deep austerity as the price of relieving some of Greece’s government debt. The austerity destroyed the reform, and discredited PASOK for having done Merkel’s bidding.

My interviews with PASOK leaders suggest there are things they wish they had done differently during the reign of austerity in the eurozone.

But unless New Democracy and PASOK take a much tougher posture in the June election, they are likely to be defeated as having been complicit in the present disaster.

There are a few in PASOK who would like to ally with Syriza, but most of the party elite sees an alliance with the center-right New Democracy as the only possible course. Syriza’s Tsipras is widely seen as untested. “If he makes promises that he can’t deliver because of the EU’s resistance,” one PASOK leader told me,  “then who calls out the police when people storm the banks?”

But the trouble with a PASOK coalition with New Democracy is that the last New Democracy government was even more emblematic of the corrupt power structure.

Greece now has the paradoxical power of the weak—if Greece can find a way to use that power to bring about constructive policy changes both in Brussels and in Athens.  And it is dawning on elites that it’s not practical to toss Greece out and then build a higher firewall around the rest of Europe, for the fire has already spread. The same speculators who took down Greek bonds are now menacing the financial systems of Spain, Portugal, Italy, and going after the euro.

Many of Europe’s leaders are deserting Merkel. But if the austerity caucus keeps on refusing to loosen the screws on Greece, they will only add to Syriza’s growing vote.

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