Greece is obliged by today or the latest tomorrow Friday morning to submit to its Eurozone partners a new program with more severe austerity and deeper reforms, if the country wants to stay in the Eurozone. Alas, this is exactly the program the Greeks rejected last Sunday in a referendum. In case the Athens proposal is considered by Saturday’s Eurogroup (the 19 euro area ministers of finance) as inadequate, the EU 28 leaders’ summit convened for Sunday will set the path for a Grexit. It will be triggered by the collapse of the country’s banking system, after the European Central Bank cuts the liquidity lifeline. The introduction of a new currency or, at the limit, a parallel money, will seal this prospect.
This financial scenario leading to a Grexit can only be reversed if the Greek Prime Minister Alexis Tsipras chooses to totally alter the Greek political scenery. In this alternative path Tsipras would accept a third severe austerity and deep reforms program and introduce it to the Greek Parliament for approval. Many Greek political commentators insist that this is doable. Let’s see how he can do it.
How he can do it
As things stand now in Tsipras’ left-wing governing party, the SYRIZA, its extreme left deputies are expected to vote down this eventual third austerity program. However, the new plan can be approved in the legislative with a massive vote from the opposition parties. Last Monday, Prokopis Pavlopoulos the President of the Greek Republic summoned in all the Parliamentary party leaders – except the fascist Golden Down – of course including Tsipras. In this meeting the leaders present in the room, at the exception of the Communist Party, actually signed a document reassuring the PM that even a very tough new program will be voted for by their deputies.
In such a possible occurrence Tsipras will be able to easily pass in Parliament such a new severe Memorandum of Understanding, securing more funds from the country’s creditors. In case though that 13 or more deputies of the two government coalition parties (SYRIZA and the chauvinistic right-wing ANEL party) choose to vote down this legislative proposal, automatically Tsipras loses ‘the declared’ parliamentary base. If this turns out to be the case, the Greek Parliamentary tradition demands that the Prime Minister resigns on the spot and an early legislative election is held within the next 40 days.
According to the constitution, this newer election, within the same year from the previous one of 25 January, will be conducted with party candidate lists drafted exclusively by their leaders. In this way Tsipras could exclude from re-election the SYRIZA deputies who rejected the new Memorandum, for the very good reason that they brought his government down. Luckily for him, there is strong evidence that he will win a possible new legislative election with a much larger majority than the 34.5% of January. At that time SYRIZA won 149 seats in a house of 300, forcing it to cooperate with ANEL’s 14 deputies in order to form a government.
Nevertheless, the Greek voters supported Tsipras’ crucial policy options with a 61.35% in last Sunday’s referendum. Not to forget that the question asked was quite vague and voters actually just backed Tsipras himself, thus making him an unquestionable leader, the dominant figure in Greece’s politics. This is a quasi guarantee that if a new election is held during the next weeks or months Tsipras is going to win it for sure with a strong majority.
Yet he won’t be any more the leader of the left but rather the leader of a center-left reformed mainstream party. The reason for that is that he would have banned from the party’s candidate lists the extreme left wingers. If this scenario materializes, Tsipras and his SYRIZA will cease inspiring other European unconventional left-wing political parties like the Spanish Podemos, which represent a real threat to the Germanic Europe’s economic policy strategy.
Coming back to the financial side of this scenario, it is certain that Greece would gain a much needed debt restructuring, going together with the bitter pill of the new austerity, deep reforms and privatizations program. The truth is that without a rescheduling of debt maturities, a lowering of interest rates, an extension of grace periods or even an outright haircut, the country will find it impossible to apply the new severe austerity and reforms program.
During the next three days until Sunday night, we will all know what Tsipras is going to do. Truly Greece’s future is now in his hands. He can actually turn the poor country any way he wants.