BY Fraser Tennant
Greece’s newly re-elected prime minister Alexis Tsipras has described his party’s return to power as a 'victory for the people’ and pledged to make persuading the country’s creditors to remove more debt his first priority.
The second general election to be held in Greece this year - triggered by Mr Tsipras' announced resignation on 20 August - saw the left-wing Syriza party win 145 seats (35 percent of the vote), delivering a fresh mandate to govern, albeit alongside a coalition partner.
Despite the re-endorsement, analysts are warning that Mr Tspiras faces tough times ahead.
“Syriza’s resounding win came after a painful and dramatic seven-month negotiation process with creditors that ended last July with the signing of a new harsh austerity program," observes Dimitris Rapidis, a political analyst and director of the think-tank, Bridging Europe. “In addition to that, Tsipras’ major argument to convince voters was the renegotiation of the sovereign debt that is expected to surge over €300bn.”
Further concern was expressed by the familiar figure of Yanis Varoufakis, the prime minister’s former finance minister, who said that Mr Tspiras’ fate “depends on whether his new government implements genuine reforms to give bona fide business some confidence to invest, and uses the intensification of the crisis to demand real concessions from Brussels".
The vote by the Greek people to give Mr Tspiras a second chance to make a difference means that full implementation of the spending cuts demanded by international creditors (and promised by Syriza in the summer following an anti-austerity U-turn) in return for an EU bailout of €86bn, will now have to be swiftly carried out by the new administration.
“The Greek economy will get back to health if it sticks to the terms of its new bail-out program," European Commission vice president Valdis Dombrovskis said earlier this week. “If the reforms agreed are properly implemented, Greece can grow again quite quickly. The underlying growth potential is still there.”
Should the newly installed Greek government fail to implement the reforms and appease international creditors, the consequences for the country remain dire: a default and potential ejection from the eurozone (the dreaded Grexit).
“The true winners of the Greek election are the creditors that will now squeeze the government to force a bailout deal that is designed to fail," claims Mr Rapidis. “Syriza pledged to implement a parallel program against austerity aimed at supporting and protecting the most vulnerable parts of society. But under pressure from creditors, it is likely that the Greek government will end up failing in implementing both programs.”
For now, although the election may be over, Greece’s long-standing economic problems remain.