Tsipras has pledged to discard the austerity program the Greek government agreed to in return for international loans. Syriza party leaders say he will effectively nationalize the country’s banks. He insists that the leverage is on Greece’s side — that in the end the likes of German Chancellor Angela Merkel and International Monetary Fund Managing Director Christine Lagarde will cave and give the recession-plagued country more time and more money rather than risk a euro exit.
If there’s any doubt about the stakes, the world’s central banks are girding for the worst.
“On Sunday, the old world will die,” Tsipras said at an Athens rally Thursday, his brow knitted and sweaty on a sultry Greek night. Invoking what has become Greece’s modern version of a mythic beast — the “memorandum” that lays out the strict conditions for the country’s bailout loans — he made clear what will happen if Syriza wins enough parliamentary seats to form a government.
“This will be a historic change for Greece and Europe. . . . The memorandum is coming to an end.”
That sort of epochal language is driving Syriza’s popularity in a country weary of a five-year recession that only seems to deepen, and of a pile of debt that has grown larger in the hands of bailout lenders such as the IMF, the European Central Bank and other European nations. Right now Greece is obliged to pay about $15 billion a year in interest alone, money those institutions sequester from each chunk of Greece’s emergency loans — kind of like a credit-card company adding monthly payments to the balance of a bill.
Tsipras has captured a sense of indignity over the situation and reflected it in a youthful package. Square-shouldered while standing on a stage at Athens’ Omonoia Square in a white shirt with sleeves rolled up, tie discarded and collar unbuttoned, he called out by name the politicians he hopes the country will reject — all of them a generation older, professorial in demeanor, sometimes more comfortable speaking in English than Greek.
At the National Technical University of Athens, where Tsipras studied how to build roads and fire up a crowd, former teachers remember a strong-willed student. The campus outside the city center is speckled with revolutionary graffiti, while student opinion covers the spectrum from hard-left anti-capitalist to hard-right anti-immigrant.
“He has been in protests and occupations since he was a teenager,” said Konstantinos Moutzouris, chairman of the civil engineering department when Tsipras was a student and now a conservative candidate for parliament on the Greek island of Lesbos.
“He is soft-spoken, but if you dig inside him, he is iron. You don’t change his position,” Moutzouris said.
The perception that Tsipras will prove too strident for the intricacies of an international financial negotiation is one reason the election is an apparent dead heat between Syriza and the center-right New Democracy party led by Antonis Samaras.
Samaras, a Harvard MBA, was as a key opposition figure under earlier governments and signed letters agreeing to the terms of the international bailout. In New Democracy circles, there is talk that a Tsipras victory would prompt Merkel and others to make an example of Greece and push it from the euro to prove the region will enforce its budget and economic standards — courting short-run calamity in return for longer-term confidence.
Tsipras’s rise “is a mistake that’s about to become a tragedy,” said Chrisanthos Lazaridis, a New Democracy candidate.
New Democracy television ads set that tone, with disappointed school children wondering why they don’t get to use the euro like other kids around Europe — even in Cyprus! — and a Greek flag sadly descending from among the others in the European Union.
Syriza’s ads note how Samaras is suddenly ready to demand easier terms for the deal he endorsed just a few weeks ago, when Greece signed a second bailout package that was already a renegotiation from its original 2010 rescue.
Assuming a government emerges from Sunday’s voting — an election last month left New Democracy in the lead and Syriza second, but neither able to form a coalition with Greece’s myriad other parties — the real battle will be joined. Whoever takes power will have to open immediate talks with the IMF, the ECB and the European Commission over an urgently needed tranche of bailout money — negotiations that will set the fate of the bailout program and perhaps the euro itself.
New Democracy officials agree the deal needs to be renegotiated — at least to slow the pace of Greece’s economic adjustment, ease the government budget cuts needed in coming months to meet the pact’s targets and leave a bit more income to circulate in the economy. Growth is cratering, and needs to be revived.
IMF and European officials have left room for modest amendments to the program. But the sort of changes envisioned by Tsipras — such as repealing a cut in the minimum wage that IMF economists say is important to encourage hiring — may go too far. Syriza’s plan for state control of the banks, meanwhile, would likely endanger some $38 billion set aside by Europe and the IMF to restart Greece’s banking system.
The constraints, in other words, are real and binding: Greece’s government does not collect enough money month to month to pay its bills, and the economy as a whole needs hard currency from outside to import oil and other necessities. If the cash squeeze leaves Greece unable to pay bondholders, this default could trigger Greece’s exit from the euro, either by its own choice or at the insistence of other euro-zone members.
With Tsipras, the essential puzzle is whether to fully trust a man whose gravity-defying platform would have Greece tear up the IMF’s advice, put government officials in charge of bank lending, quickly collect the taxes no one else has been able to collect and all the while remain within the euro and restore the faith of global investors.
Many here feel Tsipras would inevitably become more moderate if he wins. Campaign rallies for Syriza include a smattering of the communist and other hard-left parties that fall under its umbrella — the name in Greek is an acronym for Coalition of the Radical Left. But investors say Tsipras’s economic advisers have taken a tempered stance at meetings in London and elsewhere — insisting they will keep Greece within the euro zone.
“This has to be solved in the European framework. It can’t be otherwise,” said John Milios, a Syriza candidate and economic adviser, who said the party, if elected, will push for greater changes to the currency union that he says are needed to help countries such as Spain and Italy, as well.
The policies advocated by Germany and others, including a more limited role for the ECB, “can’t stabilize the situation. The whole of Europe is in recession.”