Grexit Daily News – 6 September 2015


6 September 2015 — Why the hell are the Greeks having another election?

For the benefit of the non-Greek readers of this blog, I thought I would offer a summary of what the hell exactly happened and Greece is having another election on September 20. Also, this is a good opportunity to summarise what is at stake and what are the consequences of the performance of various parties.

Tsipras, the outgoing PM, lost effectively half his party when he signed on to the new Bailout agreed in July. After staging the ridiculous and deceiving Greferendum, he immediately took the decision to reach a deal with the creditors (on their terms). Tsipras knew that his party, in large numbers, perhaps in the majority, would not back this decision. Of course they wouldn’t. Syriza is a protest party built on opposition to the MoUs/Bailouts. Tsipras himself mobilised the party to support the prideful OXI in the referendum. Syriza fought (badly) a battle with the creditors for 7 months. Why would they accept a capitulation?

When the split became official with the departing Lafazanis promising to start a new party (now called Laiki Enotita – Popular Unity), Tsipras lost his parliamentary majority. His far right allies ANEL fared better, but even with their support Tsipras had trouble managing even 120 votes in the 300 seat Parliament.

His options were to govern with the support of the opposition (Nea Dimokratia -ND for short, PASOK and Potami) or to call an election.

Tsipras chose an election to resolve his internal party problems, not caring in the slightest what a new election will cost the country.

Tsipras now claims that a renewed mandate (again) will allow him to ‘manage’ the dreadful deal he achieved after 7 months of failed negotiations, led by Prof. Varoufakis. But if the aim is to ‘manage’ the hated Bailout deal, why not do it in the current parliament with the support with the opposition?

Polls consistently show high public support for a unity government.

Tsipras is an opportunist and a populist. Command of his internal domain is more important than managing the bailout or stabilising the country. This is why he chose an election. Tsipras, having lost his command of the anti-austerity/anti-MoU message, is now asking Greeks to vote for him because he is ‘new’ and because he is ‘better’ than everyone else, and leftier than the mainstream parties.


While this is obviously nonsense, as I explained in other posts, what are the alternatives for Greek voters?

The main contender is ND. As the electoral system offers a bonus to the first party in the election, even a very small lead offers the first party an extra 50 seats. This allows then the first party to form a coalition government with other willing partners. If Syriza wins, Mr Tsipras says that he will work with ANEL. As ANEL are unlikely to enter Parliament again (they are polling below the 3% threshold), Tsipras could deal with PASOK or even Potami. If those parties do not gain enough seats to supplement Syriza’s, then no-one knows what will happen. As Mr Tsipras is so fond of renewed mandates, I am guessing another election may be in the cards.

ND offers a more varied menu of choices. They promise to deal with anyone (Golden Dawn apart of course) who is willing to support a MoU/Bailout friendly Pro-EU/Euro government. Meimarakis has said he will even join with Tsipras in a grand coalition if that is needed.

Meimarakis looks folksy, but he is an unsavoury character. He comes from the hard core establishment right in Greece, the violent right. Along with his contemporaries (the disgraced Voulgarakis for instance) he committed a lot of sins over the years. He is not a centre-right figure. He appears less nationalist and less right-wing than Samaras, but a government under him will not be friendlier. Meimarakis represents a traditional right straight out of the 1970s.

Nonetheless, if the aim is to secure Greece’s position in the Euro and to implement the terms of the new Bailout, ND is the best bet at the moment.

nea dimokratia1

What about the other smaller parties? Potami is the most interesting prospect (for centrist voters). It is a new party, that claims to be a modern party, rejecting the clientism and sordid practices of the left and the right. There are problems though, which explain the party’s falling support. Potami is very much a leader defined party, with Theodorakis calling the shots. Its anti-establishment claims are tainted by support from certain rich ‘oligarchs’. Also a message of ‘modernisation’ is lacking focus. To make matters worse for Potami, the current electoral system (dreamt up by the current President, Pavlopoulos, by the way) puts smaller parties under pressure. Voting Potami instead of ND may well make Mr Tsipras the commanding figure on September 21st, something he does not deserve.


What about PASOK? The old dominant socialist party is not a serious contender anymore. The fact that Papandreou is not running with his vehicle KIDISO means that the almost 2% he got in January will probably repatriate to PASOK, ending any questions as to them making the 3% Parliamentary entry threshold. Beyond this, they are unlikely to get more than a handful of MPs, so they could only support a majority with the combination of a strong first party, or multiple partners.

The conclusion to this presentation? If this contest was held to clear up Greece’s stance towards the Euro, and coalitions of forces run against each other, presenting different visions for the future of the country, within and without the Euro, then an election would be useful. As it stands, this election is almost content free, run on a personality basis. It helps no-one, and certainly will not help Mr Tsipras resolve his internal party problems if he comes second.

The best result of this election for the future of Greece will be for Mr Tsipras to come second.




7 thoughts on “Grexit Daily News – 6 September 2015

  1. What is the expression? A rotting fish smells first from the head. You are almost certainly correct. The least bad outcome is for Tsipras to fail. However you highlight the sad problem of governance in Greece. Perhaps it is best in the long run that it is effectively run from Brussels for a while. It may open Greek eyes to new possibilities. In the end each state gets the politicians it deserves.

    Liked by 1 person

    • The most rational proposal on table was of course Herr Schäuble’s proposal for a temporary exit from the Eurozone.

      This option is very much alive to-day. It is highly questionable if Greece will be able to meet the demands of the Troika. And if it doesn’t, there is very little chance the other EMU members will fork out a 4 th bail-out.

      Their leaders might be willing (to save face), but their electorate is not in the mood. Germany is expected to house and feed approximately 800.000 refugees this year.

      There will be very little patience with the Greek electorate that wishes to stay in the eurozone, but year after year fail to meet the conditions they agreed to.

      In that respect, it doesn’t really matter what the Greek vote. Their faith is in the hands of others.

      It therefore is a pity that Yanis, after voting against the third bail-out, hasn’t taken the next logic step and advocate life outside the eurozone. His Green Working paper could have been a nice start.

      It appears Yanis is not another Alexander after all.

      Liked by 1 person

  2. mikenetherlands says:

    A (temporally) Grexit will be a disaster. Investors will turn there back on Greece, import goods, 50% of the foods, petrol, ect., will be unpayable for the Greeks and pensions will be worthless.

    And what to do with all the contracts and mortgages in Euro’s? Chance them to drachmes? And the Greek stock marked? Golden times for Law firms will it be!

    And you will get a black marked of euro’s in Greece. In my opinion it will end up in chaos and at last tanks in the streets.
    And, the most important part, the Greek population doesn’t want a grexit. How do you want to interduce the drachme? A democratic way is impossible. The Greeks will never accept the drachme. Never!

    And, when the troika fails, Greece will stay in the eurozone. The simpel fact is, there is no alternative.
    Montenegro and Kosovo has no currency of its own. Why should Greece have one? And about Yanis his paper , the idea was explicit to stay in the eurozone. He is against a grexit.


    • I know what Yanis wanted. Staying in the EMU whilst having the nominal value of the Greek debt to be canceled.

      Well, we know what happened to that plan, don’t we. This has been refused a number of times.

      The Greek debt to banks has been refinanced by the Troika after the banks took a 50% haircut. This was the first bail-out.

      Then the Greek fumbled on repaying this refinanced debt, so a third bail-out became necessary.

      On this third bail-out a lot of pretending is going on. On both sides. The EMU partners pretend Greece can meet the conditions of the third bail-out. Greece, that is, most parties do the same.

      Only Yanis openly doubts this.

      So what happens when Yanis is right and the conditions of the third bail-out can’t be met?

      Will the EMU partners approach their parliaments with a proposal for a 4 bail-out and by doing so kick the can again further down the road? Or will they decide, we won’t deal with this any longer.

      Let’s take our losses and have Greece solve their problems their own way, with their own currency.

      I think that this will be the most likely outcome, irrespective what the Greek will vote or want.


  3. mikenetherlands says:

    Professor Yanis is not a diplomed medium.
    I am realy sorry for Yanis, the first news I was reading in the press about the Ambrosetti Forum in Cernobbio, was that he was wearing a dark coat and a en blue shirt, type fantasy. And this is the drama of Yanis Varoufais, thanks to his briljant press chef. Most people know more about his bike and dress style than about his works.

    Klaus Kastner gave a excellent review on his blog about Yanis Plan for Greece’s Recovery & Growth.
    Some parts of the plan are interesting, some are not useful.

    Our continent Europe is not a continent of strong visions. In my opinion we will end up somewhere in the middle with bailout 3. Not enough for a grexit and not a succes.


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