Friday, January 25, 2013

The Incredibly Useful Alexis Tsipras

Readers of this blog know that I have little sympathy for SYRIZA leader Alexis Tsipras. Yet I cannot help but be grateful that he exists. Of course, I haven’t always been that grateful. On June 17, as the second election was taking place, I was terrified and depressed at the prospect that he might actually win first place in the polls. But just like a near-death experience lets you appreciate life anew, so his near win allowed me to appreciate his existence in a new light.

Now, I do not take Tsipras very seriously. And neither do most Greeks. Consider these public opinion data points from Public Issue. Around four in ten Greeks have a positive opinion of Tsipras, but only three in ten think he would be the best prime minister for Greece. Even fewer (one in four to one in five) believe that a SYRIZA government would be the best government for the country. And only one in six are actually satisfied by the opposition. The public is attracted to Tsipras for the same reason someone is attracted to his ex’s not-so-cute roommate—you don’t really like her, but you are annoyed at your ex. In Greek politics, PASOK is the ex, and Tsipras is the not-so-cute roommate.

The not-so-cute roommate can be useful sometimes, and so it is in Greek politics. Tsipras serves two functions. First, by gaining the support of the left, he is keeping PASOK and (less so) DIMAR firmly in the coalition. PASOK’s estimated vote hovers around 8%, much below the 12.2% it got in the June 2012 elections. DIMAR’s estimated vote is around the same as the June elections. So the two parties that could force elections by withdrawing their support from the coalition have no incentive to go to the polls. This allows New Democracy, which actually wants to change a thing or two in Greece, to push forward with reforms.

Second, Tsipras shows starkly what Greece’s choices are. The public may be angry and dissatisfied at the status quo, but few folks have any illusions that Greece under Tsipras would be any better—most suspect it would be worse, far worse. Tsipras reminds us of that fact by his shallow and contradictory political thinking (“I will get all the money I want without any concessions whatsoever”); and he does so also by his blatant support for the narrowest interests, no matter how philosophically untenable that support is (for example, his opposition to harmonizing the wages of the employees in parliament with the rest of the public sector). The not-so-cute roommate becomes even less attractive when you actually talk to her.

That is why I am grateful for Alexis Tsipras—his opposition is strengthening the government coalition, and it is reminding the public of how worse things would be if he were in charge. In doing so, he makes the policies that he loathes—and that Greece desperately needs—that much more likely. And the Greek public is thankful that he plays that role—which is why it likes him just where he is: in opposition.


  1. Well, numbers show also that people also don't take New Democracy and the coalition parties very seriously. Public issue graphs show that N.D.+government coallition popularity numbers show an increase since the last few months, but all we are talking about are differences and changes not more than few % in most cases. Of course, if graphs are presented "nicely" (e.g. zoom the y-axis between 15% and 20%) a change of 0.5% looks like a big deal. But lets not forget that absolute numbers show that all leading parties are very low, not matter how big deal opinion polling companies make for small changes.

    Obviously, N.D. has gained some popularity after the loan was cashed a month earlier, but it may again loose this few % popularity when the time for the next loan installment arrives, and EU and IMF as usual may well discover that the program failed again once more forcing new salary cuts or taxes.

    I also think that N.D. "actually wants to change a thing or two in Greece", but the problem is that they are happy with changing "one or two things" and make a big deal about it (so that they can establish a few % difference from SYRIZA). Hundreds of things need to be changed.

    As for the rest, they prefer to stick to old practices... Supporting e.g. Venizelos for the Lagard case (despite obvious illegalities from his side), not moving on seriously with fighting tax-evasion (e.g., spreading rumours that SYRIZA supports/organizes terrorist attacks and groups so that they can reduce its popularity, adding unannounced increases in the electricity bills etc., just show that nothing has changed in essence. Examples are numerous. Whatever keeps them few % ahead is "justifiable". But that's violation of common sense.

    I am not a big fan of SYRIZA but not so much because of Alexis Tsipras. From all interviews that I have seen from him lately, I never got the impression that his opinion is "I will get all the money I want without any concessions whatsoever". That's usually the way that the media tend to promote his views. I just don't think that Tsipras's group comprises (yet) enough serious members that can really govern a country successfully.

    But, overall, if you are grateful that Tsipras exists because his (or SYRIZA's) incompetence gives the government coalition a free pass, that's a bit sad. SYRIZA is not yet a serious political party and may never become such, but the same is true for N.D. If we lower our expectations for the government, then we add one more big problem...

  2. The other thing with Tsipras is that his fundamental analysis has some truth to it. In speeches made at Brookings and Columbia the other night, he basically states the following: if you compare Greek public expenditures to that of other European countries, Greece spends lower than average; where Greece fails is in the collection of revenues which is very low and due to the weakness of the state; this problem was multiplied by foreign creditors (mainly german), who funded this gap, and exacerbated the crisis.

    Of course what Tsipras does not speak to is the corruption and inefficiency and general ineptitude of the greek public service that stifles the economy.

    But outside of some cosmetic changes, the past four of five years have not really seen as much change as one would have expected as a result of the crisis. The ultimate problem in Greece is the establishment. Their inability to see beyond their own short-sighted self-interests prevents Greek governments from embarking on actual change.

    This blog has argued at some point that Greece has not enacted real austerity measures as they really have not brought back down public expenditure levels to the points of earlier spending in the early '00s. I disagree. The measures that have been enacted, by cutting pay and what not have cut the economy at the knees, and has frozen the country in a state of freefall. I hope that some growth returns in 2013 or 2014, but it's going to be a long slog after that.

    1. As for creating change getting in the political spectrum promising draconian measures which need to be imposed on Greece, such as, cutting red tape, improving public efficiency, reducing waste unfortunately is unlikely to win much votes.
      Politicians, crooked or otherwise and anywhere in the world win votes when their constituents think that a brighter future exists immediately after election. So Greek politics/economics is really in between a rock and hard place.

      And concerning public expenditure my understanding is that the state spends somewhere close to 40b per year on 1million people either working directly in governments or the Government enterprises like Olympic Airways. The question is how much of that is a waste? How much can an efficient Greek state run on? Is it 50% less?

      As for tax evasion, Greece has one of the lowest nominal corporate taxes in the EU.(of course the nominal rate might be offset by what you can write off) With high taxes on individual income and sales tax, property tax , cap gains probably will give a huge boost to foreign investments if they liberated the labour law , abolished the minimal wage and made it easy to dismiss workers and somehow reduce the powers of labor unions.

      No matter how I look at it Greece and the rest of the EU is nowhere close to have found a way out.

    2. It is spreading to other European countries, so Greece was just the first government that the market realized was unviable.

      Probably you are right, Greece is not even the worst of it, but no country can create an economy by just a wave of the hand from government. We will learn this lesson sooner or later.


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