The new general election will secure Greece’s position in Eurozone; at least for some time

Alexis Tsipras, the Greek Prime Minister, leaving the European Parliament plenary in Strasbourg after delivering a speech. He was strongly criticized by some MEPs for his decision to hold a referendum on 5 July on the bailout terms for the country’s sovereign debt crisis but others praised him for that. (European Commission Audiovisual Services, Date: 07/07/2015).

Alexis Tsipras, the Greek Prime Minister, leaving the European Parliament plenary in Strasbourg after delivering a speech. He was strongly criticized by some MEPs for his decision to hold a referendum on 5 July on the bailout terms for the country’s sovereign debt crisis but others praised him for that. (European Commission Audiovisual Services,
Date: 07/07/2015).

The very next day that the Greek government signed a three year Memorandum of Understanding (MoU) for a new stability support program of €86 billion with the European Commission, Prime Minister Alexis Tsipras triggered an early legislative election. To do this he had to resign and according to the constitution, the President of the Republic has to separately and successively mandate the second and the third largest parliamentary party to form a new government. Quite predictably this will prove impossible and the country will have to hold a general election on 20 or 27 September.

25 deputies left SYRIZA

Today the President of the Republic is expected to ask the third largest Parliamentary party the ‘Popular Unity’ to form a government. This political formation is a last minute arrival and is made of by 25 deputies who abandoned the governing SYRIZA exactly because this party under Tsipras signed the MoU with the European Union. In doing this the 25 deputies left the government in the air without a Parliamentary majority. They propose that the country should abandon the euro area and possibly the EU altogether, denounce its foreign debts, introduce a national currency, the new drachma, and search for a wider strategic alliance with non Western countries like the BRICS (Brazil, Russia, India, China, South Africa), Venezuela, Argentina and other dubious allies. To be noted, that the BRICS have never invited Greece to join their New Development Bank (NDB).

During the past few weeks all the 25 and some more have voted down in Parliament Tsipras’ choices to accept the harsh terms of the third MoU which the country signed with its creditors in order to stay in the Eurozone and continue using the euro. The President of ‘Popular Unity’, Panagiotis Lafazanis, is a back room gray personality who has been steadily opposing Tsipras’ leadership in SYRIZA. All along the past months, even before the 25 January election that brought SYRIZA to power, this left wing collection of groupings, lacked a common vision about their political goals nor did they share a collective ideological identity.

Can Tsipras do it again?

Now, after this group of extreme left wingers abandoned SYRIZA the party is becoming much more manageable and the power of its President Tsipras is not contested seriously any more. By the same token, SYRIZA becomes an option for a much wider spectrum of voters ranging from the left to center and even the center right. After the partitioning of the 25 extreme left-wingers, SYRIZA is now shifting in full towards the center closing in fast towards the social democratic part of the political spectrum. Predictably, this hasty transition will greatly increase its audience. Together with the general resentment against the two old parties, New Democracy (center right) and the socialist PASOK, which alternately governed the country for the last forty years, Tsipras can logically expect a new victory in the coming election.

His problem will be though that he may not gain an absolute majority in a house of 300. In such a case he may need one or more parties to form a coalition government. But then again there will be no shortage of volunteers. Practically all the political parties that support the Eurozone option for the country will be available to cooperate. Not to forget that it was with their votes in the Parliament that Tsipras could pass all the latest harsh conditions in order to keep Greece inside the Eurozone.

A three year support

To this effect, the European Stability Mechanism (ESM), Europe’s firewall established in 2012 in response to the global financial crisis, will disburse up to €86bn in loans over the next three years, provided that the Greek authorities implement reforms to address fundamental economic and social challenges, as specified in the MoU. To be noted that all the financial needs of Greece will be covered exclusively by EU sources.

The International Monetary Fund has refrained from participating in the Greek agreement. It may join again the creditors’ lines if Athens conforms to the obligations it undertook and again only if an “explicit and concrete agreement” on a debt relief from the country’s Eurozone creditors is signed. For the time being the IMF acts as a technical advisor in the negotiations with Greece. This stance signifies a strong differentiation between Washington and Berlin vis-à-vis the Greek case and also in Eurozone’s economic policies in general.

Most need the euro

Coming back to Greece’s internal political spectrum, one finds that it is not any more compartmented only under the traditional left-center-right division. The option of staying or leaving Eurozone and possibly the European Union in general runs within the entire political horizon from end to end. The fascist Golden Down and the long-established communist party (KKE) are both adamant in supporting a Grexit, the exit from Eurozone and possibly from the EU. The new extreme left ‘Popular Unity’ formation of 25 deputies has joined this club. On the other side of the fence the rest of SYRIZA under Tsipras, New Democracy, PASOK and Potami (River) support Greece’s position in Eurozone at any cost. Those are the parties of the present Parliament though. The next election may produce more legislative parties which would attain the 3% threshold.

As things stand now in the next election the average voter will have to answer two questions. Firstly, he or she will have to decide if they want Greece to stay in Eurozone. Then they will have to choose the party which will be best placed to restart the economy and minimize the adverse effects from the new MoU Greece just agreed with the European Union. Obviously, this choice is not related only with the left or right orientation of the parties.

Predicting the results of the election

Two more factors are to decide the results of the next election. The first is Tsipras’ personal appeal to the general public. The next thing may be Lafazanis’ decision to advertise or not his convictions about the drachma. If ‘Popular Unity’ is not able to avoid the earmarking of the ‘drachma party’, the new party will not be able to heavily undercut on SYRIZA. Around 70% of the population resents the return to the drachma and more people are afraid of a singular Greek path outside the Eurozone and the EU.

It’s still a bit early perhaps to safely predict the outcome of the September vote, but SYRIZA’s first place is not disputed by many political analysts. It’s also certain that the pro-Eurozone parties will gain a large overall majority against the drachma lovers.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Who is responsible for public health? The tendencies and its benefits –or not– on Health Education around the world

Britain and Germany change attitude towards the European Union

The untold story of who caused and who pays for the economic crisis

Minority governments ‘à la mode’ in Europe but can they last long?

“Who do I call if I want to call Europe?” Finally a name and a number to answer Henry Kissinger’s question

EU Parliament raises burning issues over the FTA with the US

Fair completion rules and the law of gravity don’t apply to banks

Deutsche Bank: the next financial crisis is here and the lenders need €150 billion from taxpayers

The European Commission to stop Buffering

MEPs and European Youth Forum call on EU to Invest in Youth

Will ECB win against low inflation by not following Quantitave Easing?

EU responds to terror fallout by eroding borderless Europe and molesting the refugees

EU Parliament and Council: Close to agreement on the bank resolution mechanism

EU finally agrees on target for 40% greenhouse emission cuts ahead of Paris climate talks

Making money from meeting the SDGs? An overarching approach to sustainable development.

EU’s Mogherini visits Turkey “to step up engagement” and highlight interests

Diana in Vietnam

MWC 2016 LIVE: Xiaomi looks to revive growth with flagships

Italy can stand the US rating agencies’ meaningless degrading

“China is the only BRICS country to have either met or possibly slightly surpassed my expectations”, BRICS inventor Jim O’ Neil from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

Resisting EU budget cuts

EU Trust Fund for Africa: Can it be beneficial for Italy and tackle the migration crisis in the Mediterranean?

The Brits are not an exception and that’s why they voted to leave

Is the European Banking Union an impossible task?

Trump to run America to the tune of his business affairs

Council’s position on Visa Directive a step back for young people’s mobility

Civil society organisations disenchanted with “Youth Guarantee”

The financial sector cripples Eurozone growth prospects

Zhua Zhou: Choosing The Future

Is Eurozone preparing to abandon austerity and stagnation?

EU Parliament semi worried over democratic deficit

Banks cannot die but can be fined

Competing with Apple and leading innovation: Google’s world replies to EU on android charges

Does the EU want GMOs and meat with hormones from the US?

EU security and defence industry prepares positions for ‘producers’ and ‘customers’

EU Council: Private web data to be protected by…abusers

My unlimited China

Towards a seamless internal EU market for industrial goods

Is it impossible to place the banks under control?

Who cares more about taxpayers? The US by being harsh on major banks or the EU still caressing them?

Schaeuble wants IMF out and bailouts ‘a la carte’ with Germany only to gain

The strong version of the EU banking union gains momentum

Economic sentiment and business climate stagnate in miserable euro area

Who and why want the EU-US trade agreement here and now

Draghi reserved about Eurozone’s growth prospects

“At the Environment Assembly citizens expect clean, not hot air”, the Head of UN Environment in Europe underscores in a Sting Exclusive

Q&A on the 19th China-EU Summit to be held on 01-02 June 2017 in Brussels

Doctors vs. Industry 4.0: who will win?

EU’s unsparing question to UK: now what kind of future relations do you want?

A Sting Exclusive: “Europe must be more ambitious in COP21 and lead on climate finance and sustainable development”, Green UK MEP Jean Lambert points out from Brussels

The consequences of Brexit seen by a European young entrepreneur

EU readies for eventual annulment of the Turkish agreement on immigrants-refugees

Learn from the margin, not the center: digital innovation with social impact as transformative force bridging digital divide

Tiny Iceland teaches the West how to treat bankers

What is the IMF telling Eurozone about fiscal and banking unification?

A long German political winter is on the way

Youth and children in Europe set the new perspectives for the decades to come

EU-US to miss 2015 deadline and even lose Germany’s support in TTIP’s darkest week yet

Preparing for developing countries the ‘Greek cure’

In dreams and in love there are no impossibilities

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s