At first blush, the Greeks seem to have done a good thing by replacing Alexis Tsipras’ left-wing government controlled by the SYRIZA party with the nominally conservative New Democracy:
Greece’s opposition conservatives returned to power with a landslide victory in snap elections on Sunday, and Prime Minister elect Kyriakos Mitsotakis said he had a clear mandate for change, pledging more investments and fewer taxes.
The win appeared driven by fatigue with years of European Union-enforced belt-tightening, combined with high unemployment, after the country almost crashed out of the euro zone at the height of its financial travails in 2015.
Mitsotakis said in a televised address that the election outcome gave him a strong and clear mandate to change Greece.
“I am committed to fewer taxes, many investments, for good and new jobs, and growth which will bring better salaries and higher pensions in an efficient state,” Mitsotakis said.
Tsipras took over from the conservatives in 2015 as Greece was at the peak of a financial crisis which had ravaged the country since 2010. Initially vowing to resist deeper austerity, he was forced into signing up to another bailout months after his election, a decision which went down badly with voters.
“The basic reason (for the result) is the economy,” said analyst Theodore Couloumbis. “In the past 4.5 years people saw no improvement, on the contrary there were cutbacks in salaries and pensions,” he said.
Many of you may recall the Greek financial crisis earlier in the decade, which heralded the first sign of major trouble for the European Union and showcased the increasingly deep divisions between the “core” EU nations, especially France and Germany, and smaller peripheral countries such as Greece.
At the time, both major Greek parties – the left wing parties and the right wing parties – remained committed to cooperation with the EU, which imposed harsh austerity measures on the country, which was unable to pay back its debts and badly in need of debt relief. Much like Puerto Rico, Greece has no way to effectively repay its debt and needs it partly or totally written off, with strict controls on new lending going forward.
The EU’s solution was to lend Greece more money instead, while imposing harsh austerity measures, causing the economy to sink into a depression. The populace, quite understandably, wanted an exit from the EU and a default and renegotiation of the debt instead. SYRIZA was eventually elected in 2015 and completely wiped out the traditional left wing Greek party, PASOK, with the promise that they would force the EU to negotiate, or else Greece would exit the EU.
Instead, once in power, SYRIZA reneged on all its campaign promises and continued along with the EU-mandated austerity program, an astonishing slap in the face to its supporters.
I think it is very unlikely New Democracy is going to be any better than SYRIZA. They are similar to the GOP, and don’t really differ substantially from SYRIZA in policy positions despite their rhetoric. The unfortunate Greeks can expect another five years of falling salaries, a weak economy, and EU-imposed austerity.