Last Sunday, however, Greek voters went peacefully to the polls and calmly but decisively voted Mr. Tsipras and his party out, in favor of the center-right New Democracy party headed by Kyriakos Mitsotakis. Overall, it’s a soft political landing for Greece, with hopeful implications for the resiliency of Greek, and European, democratic culture.
To give Mr. Tsipras his due, he eventually abandoned radical policies in favor of the only realistic option: acceptance of a long-term bailout from German-led creditors, which required strict debt-control measures and a prolonged recession but did enable Greece to maintain the euro. Today, Greece’s economy is 24 percent smaller than it was in 2007, but it has at least resumed growth and job creation, modest though they may be.
Mr. Tsipras achieved the bulk of his budgetary austerity through tax increases. Had he carried out structural reforms to make Greece more efficient and investment-friendly, growth might have been faster and the Greek electorate happier with his performance. As it is, interest-group politics and Mr. Tsipras’s ideology precluded such an approach, and he lost to Mr. Mitsotakis, who pledged to trim taxes, attract foreign investment and overhaul the Greek bureaucracy, whose dysfunction is a major reason that Greece ranks next-to-last among European nations in the World Bank’s Ease of Doing Business survey.
Though Mr. Mitsotakis brings a highly educated technocrat’s résumé to his new position, there are reasons to be skeptical of him and his promises, which others have made before. Greece’s structural ills may be beyond the power of any reformer to root out. And for all his good intentions, Mr. Mitsotakis leads a party, New Democracy, whose old guard shares responsibility for the political rot against which Greeks rebelled by voting in Mr. Tsipras.
Mr. Mitsotakis must act promptly and forthrightly if Greece is to finally render its debt burden, currently equal to more than 170 percent of its total output, sustainable. If he does deliver significant reform, then the rest of Europe, led by Germany, should be willing to relax the tight budgetary conditions that still constrain the government in Athens, in particular primary budget surplus (not including interest costs) equal to 3.5 percent of gross domestic product. Mr. Mitsotakis’s promises of tax relief and greater infrastructure spending are practical, not profligate. Granting him fiscal space to fulfill them would show Greeks, and all Europeans, that there is a reward for sticking with rational politics, even under the most difficult circumstances.