Greek tragedy for education opportunities

by Matt Pickles

BBC News
September 30, 2015

When considering the effects of the debt crisis on Greece, most people probably think of long queues outside banks and protests in the streets.

A less visible but perhaps further reaching outcome is that Greece's education system has become one of the most unequal in the developed world.

Although education in Greece is free, public schools are suffering from spending cuts imposed as a condition of the bailout agreements.

In practice, over the last 30 years it has become increasingly necessary for students to pay for expensive private tuition to pass the famously difficult Panhellenic exams required to get to university.

But with unemployment rising and salaries falling, many poor and middle-class families are struggling to pay for this extra tuition.

A World Economic Forum report this month ranked Greece last of 30 advanced economies for education because of the close relationship between students' performance and their parents' income.

And a professor of law and economics at the University of Athens warns that losing talented students from poor backgrounds is a "national catastrophe" which could hinder Greece's long-term economic recovery.

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After the somersault, Tsipras walks the tightrope of power

by Tony Barber

Financial Times
September 29, 2015

According to a joke doing the rounds in Athens, the best thing that Alexis Tsipras has going for him, as he embarks on his second spell as Greece’s prime minister, is that he will not be under attack from Alexis Tsipras.

All Greek governments have struggled since 2010 to implement reforms and austerity measures demanded by international creditors as the price for multibillion-euro bailouts. But no critic was more scathing of their efforts and, ultimately, more popular with the public than the leftwing populist Mr Tsipras.

Now, fresh from a policy somersault in July and August, Mr Tsipras occupies the hot seat, committed to market-friendly reforms, under strict foreign supervision, that until recently he denounced as wrong-headed and an outrage to Greek sovereignty.

It is just as well, as the joke suggests, that the moderate incarnation of Mr Tsipras has no Doppelgänger on his left flank, impatient to give him a tongue-lashing for hypocrisy and opportunism.

Ultra-leftist rivals in his Syriza party, who might have performed this role, broke with him over his U-turn but won too few votes to enter parliament in Greece’s September 20 general election. Other critics in Syriza’s parliamentary group are, for the moment, lying low, aware that the party owed its victory largely to Mr Tsipras’s personal qualities.

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Nicos Christodoulakis, "Greek Endgame: From Austerity to Growth or Grexit"

Rowman & Littlefield
2015

The book explores in depth both the origins of the Greek debt crisis and the conditions under which the economy might be turned around from its current malaise. Greek debt turned explosive after the 2008 global crisis, through a combination of a fiscal spree and domestic policy complacency, but the unpreparedness and indecision of the European Union intensified the problem of liquidity and a massive bail-out agreement became inevitable. However, the stringencies of the adjustment program led to more recession and unemployment, while social tension and political polarization became entrenched. In 2015, a radical Left party, Syriza, ascended to power on a ticket to end austerity and renegotiate Greece’s debt agreements, but a long-lasting growth and reform agenda is still to be settled upon. This book lays out some key reforms that would allow Greece to return to growth and, at the same time, keep the Euro, an option that still remains a cornerstone for the country’s economic and geopolitical stability.

Nikos Christodoulakis is a Professor at the Athens University of Economics and Business. Research Associate at the Hellenic Observatory, London School of Economics, UK. Former Minister of Finance for Greece (2002-2003) and Acting Chairman of the Eurogroup.

More info

A fox inside the Greek henhouse

by Tony Barber

Financial Times
September 25, 2015

Alexis Tsipras, Greece’s re-elected prime minister, is finding the first few days back in government anything but plain sailing.

On Thursday this blog reported how Mr Tsipras had demanded the resignation of a deputy transport minister barely 24 hours after having appointed him. The minister, Dimitris Kammenos, was from the rightwing nationalist Independent Greeks party, the junior coalition partner to Mr Tsipras’s leftwing Syriza party. Embarrassingly, his social media accounts contained anti-Semitic content.

Now some curious details are emerging about another deputy minister, this time from inside Syriza itself.

They concern Alexis Haritsis, who, as a deputy finance minister, has been given the responsibility of ensuring that Greece makes the most efficient use possible of the billions of euros that the nation receives each year in EU structural aid funds (money that is separate from bailout funds).

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Triumphant Tsipras returns to fight for Greek economy, debt relief

by Lefteris Papadimas & Renee Maltezou

Reuters
September 21, 2015

Alexis Tsipras took the oath of office for a second term as Greek prime minister on Monday, promising to revive the crippled economy while demanding debt relief from creditors as his "first big battle" following an unexpectedly clear election victory.

The firebrand leftist solidified his position as Greece's dominant political figure in Sunday's election, but faces a dauntingly long "to do" list that includes implementing austerity polices and dealing with migrants landing on Greek shores.

Voters gave Tsipras and his Syriza party the benefit of the doubt over a dramatic summer U-turn, when he ditched his anti-austerity platform to secure a new bailout and avert 'Grexit', a Greek exit from the euro zone.

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Greece’s Saga Is Far From Over

by Yannis Palaiologos

Wall Street Journal
September 21, 2015

After Greece’s third visit to the polls in eight months on Sunday, it’s fair to ask what the purpose of all this year’s political and economic upheaval was. The far-left Syriza party, whose leadership precipitated this year’s crisis, is back in power with almost the same share of the vote it won in January, and the hard-right Independent Greeks, known by their Greek acronym ANEL, will resume their role as zany but obedient junior coalition partner. There will be no grand coalition with the center-right or any other expanded governing alliance, which would have increased the government’s stability.

Syriza is now regularly referred to as “pro-bailout.” This is a misreading of the situation. Prime Minister Alexis Tsipras may have seen off the pro-drachma rebels led by Syriza’s most radical leftists, whose breakaway party failed to elect a single member of parliament on Sunday.

But he, his coalition and his party remain deeply skeptical of the bailout program he signed with creditors in August. A group of 53 party cadres, including Euclid Tsakalotos, the finance minister who sealed the bailout deal, wrote an open letter in late July warning against implementation of any deal such as the one that emerged, on the grounds that it would lead to the transformation of Syriza into a “systemic” party, as opposed to a radical one.

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Tsipras’s next act — governing

by Matthew Karnitschnig

Politico
September 21, 2015

Alexis Tsipras has proven his skills as a political tactician. Now comes the real test — governing.

In the coming weeks, in the wake of Sunday’s election triumph, Tsipras will have to push a slew of controversial structural overhauls, including labor market reform and taxes on farmers. Overcoming resistance to the measures in his fractious Syriza party won’t be easy. But the real difficulty will come when the government has to actually implement the reforms outlined in the bailout program.

“I’m not convinced they can implement it fully,” said George Pagoulatos, a professor of politics and economics at Athens University of Economics and Business, adding that the last Syriza government was “one of the worst” Greece has ever had. “The program relies on the Greek state for implementation and that is its great weakness.”

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Greece election: Tsipras triumphant as Syriza returns to power

by Helena Smith & Graeme Wearden

Guardian
September 21, 2015

Greece’s leftwing leader Alexis Tsipras has emerged triumphant from a snap general election after securing a dramatic victory over his conservative rival, despite a turbulent first term in office.

There had been predictions that the race was too close to call after he accepted a crushing eurozone-led austerity programme during his first term in office, but the charismatic leader looked set to be returned to power with a near repeat of the stunning win that catapulted his Syriza party into office in January.

With 99.5% of votes counted, Syriza had claimed 35.5% of the vote, easily seeing off the main conservative challengers New Democracy on 28.1%.

The interior ministry said that gave Syriza 145 seats in the 300-seat parliament, just four fewer than when Tsipras first stormed to power early this year.

Speaking in Athens, Tsipras declared: “This victory belongs to the people and those who dream of a better tomorrow and we’ll achieve it with hard work.”

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Neo-fascist Greek party takes third place in wave of voter fury

by Helena Smith

Guardian
September 21, 2015

Golden Dawn, one of Europe’s most violent far-right parties, has emerged as one of the biggest winners of Sunday’s general election in Greece, consolidating its presence in parliament and power on the streets.

The neo-fascist group came in third with 7% of the vote, behind the triumphant leftwing Syriza and conservative New Democracy. The result was met with abhorrence and dismay. In April most of its leaders were put on trial on charges of running a criminal organisation masquerading as a political force. The party – which has denied the charges – stands accused of murder, armed attacks, money laundering and trafficking.

“Golden Dawn is a movement of power, it is not a protest movement any more,” the party’s Swastika- tattooed spokesman, Ilias Kasidiaris, told Star TV as it became clear that the extremists had retained their position as the country’s third biggest political force. “Golden Dawn is the only party seeing an increase in its percentage. In October when Greeks begin to experience the consequences of the memorandum and illegal immigration you will see our support increase radically,” said the former marine, berating the country’s mainstream media for boycotting the party.

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Syriza still faces a formidable task to satisfy voters and creditors

by Tony Barber

Financial Times
September 20, 2015

The optimistic take on Greece’s election is that it was an exercise in democracy necessary to generate the political stability without which the nation stands no chance of fulfilling the conditions of its latest eurozone bailout. The pessimistic take is that it was a largely illusory exercise in democracy and it will solve nothing.

Optimists will maintain that the election result puts Greece in a much healthier place than it was in January. After an election in that month, Alexis Tsipras and his radical leftist Syriza party stormed to power on a platform of uncompromising resistance to the diet of austerity and reform prescribed since May 2010 by Greece’s creditors.

A confrontation rapidly unfolded between Syriza and the creditors that inflicted grave damage on the Greek economy and left the nation’s eurozone membership hanging by a thread.

Now, however — so the optimists’ argument goes — it appears that Syriza will be back in power, not only shorn of its most extreme leftist elements but committed to implementing a reform programme that Mr Tsipras accepted in July as the price for preserving Greece’s place in Europe’s 19-nation currency union.

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The polls are Greece’s opportunity — or its last chance

by Hugo Dixon

Financial Times
September 19, 2015

Whoever comes first in Sunday’s Greek elections, there will be everything to play for. If the winner forms a stable coalition and appoints doers as ministers, the country could enter a virtuous cycle. Otherwise, it risks being stuck in purgatory and even being sent to hell.

Neither the centre-right Vangelis Meimarakis nor the leftist Alexis Tsipras is likely to achieve an overall majority in the neck-and-neck race — even when taking account of the fact that the largest party will receive an extra 50 MPs in the 300-seat parliament. The first job on Monday morning will, therefore, be to form a stable government.

Mr Meimarakis has got a better chance of doing this. After all, he has spent the entire election campaign advocating a coalition of all parties that support the €86bn bailout agreed last month with Greece’s eurozone creditors.

The New Democracy leader almost certainly won’t be able to entice Mr Tsipras and his Syriza party into a grand coalition. But two centre-left and centrist parties — Pasok and To Potami — should be willing to join, and able to provide enough MPs to make up the numbers. A third centrist group, the centre union, may give tacit support even if it is not formally in the government.

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Greek Voters Have a Choice, But Not Much of One

by Megan McArdle

Bloomberg
September 18, 2015

Greece is having an important election on Sunday, and nobody seems to care. Last night I went to a rally here in Athens for New Democracy, the center-right party that has, somewhat unexpectedly, pulled even with Syriza in the polls. As appropriate for a center-right party, the street was filled with neatly dressed people waving enormous Greek flags.

Well, I say "filled," but from where I was standing, the crowd seemed to fit into one largish street, with a little spillover onto the next block. There in the back, no one looked much interested in the proceedings; they smoked, greeted each other, occasionally gave an interview to the roving TV crews. But for the flags, they could as easily have been at a block party as a political event. The Syriza rally Friday was decidedly bigger, and somewhat more enthusiastic, but considering that Athens is the country’s major population center, and they are going to the polls on Sunday, it was also much smaller and more subdued than I’d expected.

No one I’ve asked has exhibited any notable enthusiasm for the upcoming vote; some of them hadn’t even decided whether they were going to bother casting a ballot, or if so, who they would be voting for. People seem weary of elections, which are starting to resemble the weather in San Francisco: if you don’t like what you got, just wait fifteen minutes for the next one.

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Greece's Paper Trail Eventually Leads to Reform

by Megan McArdle

Bloomberg
September 18, 2015

Every place is full of metaphors that beckon the unwary foreign journalist. America’s huge cars are a metaphor for our people: brash, rich, more than a little heedless of our effect on the rest of the world. Before Britain got rich again, the dilapidated buildings were a metaphor for the decline of empire. French baked goods were a metaphor for everything liberal Americans imagined was better there.

Athens right now is full of such metaphors, except that it’s hard to know what makes for a good symbol, and what you’re taking too far.

Thursday in Kolonaki Square, I came across a pile of cushions and clothes inside a little park area roofed over with vines, suggesting that someone was sleeping there. Metaphor, random pile of discarded junk, or signs that Athens, just like my hometown of Washington, has homeless people who sleep on the streets?

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‘Lone wolf’ Tsipras struggles to rally faithful on eve of election

by Henry Foy & Kerin Hope

Financial Times
September 18, 2015

Not for the first time this summer, Alexis Tsipras was found wanting. It was Monday’s pre-election debate, the last before Greeks go to the polls on Sunday, and his opponent speculated that the cameras had been positioned to give the former prime minister an extra inch of height.

“How come I am looking shorter?” quipped Evangelos Meimarakis. “Or has he got taller?"

The joke struck a nerve: For Mr Tsipras, who only a few months ago seemed destined to dominate Greek politics for the next decade, suddenly appears diminished.

The former communist who tamed Syriza’s dozen competing factions and brought the party to power almost single-handedly in January at the forefront of a surging leftwing populist movement in Europe, is now running neck-and-neck with Mr Meimarakis, a lightly regarded leader of the conservative New Democracy party.

As Sunday’s ballot approaches, Greece’s fifth general election in six years, Mr Tsipras finds himself struggling to rally fatigued and disenchanted supporters who are questioning his leadership as never before.

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A Neo-Nazi Political Party in Greece Has Accepted Responsibility for the Murder of an Antifascist Rapper

by Melpomeni Maragkidou

Vice
September 18, 2015

Today marks the second anniversary of the murder of antifascist rapper Pavlos Fyssas by Golden Dawn member George Roupakias. The killing was the catalyst that led to the arrest of many of the extreme right organization's members. Along with Fyssas's murder case, several other charges were also mounted against the organization.

Subsequently various members of the parliamentary group were jailed and set to face trial in a process that should have begun in April. However, thanks to endless bureaucratic delays a witness has yet to be called.

Until recently, the official line of GD leader Nikos Michaloliakos—who stands accused of directing a criminal organization—was that his party had nothing to do with the murder of Pavlos Fyssas. In 2013, Michaloliakos claimed that George Roupakias wasn't even a member of Golden Dawn and that he had no involvement in the murder.

On Thursday, September 17, just a few days before Greeks are called to the polls for a third time in one year and with Golden Dawn polling as the third most popular party, Nikos Michaloliakos accepted political responsibility for the murder of Pavlos Fyssas on live radio.

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Greek Election Scenarios: the Good, the Bad, and the Ugly

by Nikos Chrysoloras

Bloomberg
September 18, 2015

Greece’s election remains too close to call as a three-week campaign wraps up on Friday with no clear front-runner in a vote that may put Europe’s most indebted state on course for thorny coalition talks as of next week.

Opinion polls show Alexis Tsipras’s Syriza party and Evangelos Meimarakis’s conservative New Democracy party running neck and neck ahead of Sunday’s vote. With a fragmented parliament and no apparent winner, Greece risks being dragged into difficult coalition talks that could delay the implementation of measures required by creditors in exchange for emergency loans, including for the recapitalization of banks. That’s a delay Greece can ill afford.

“Greece has to act fast after the election,” said Holger Schmieding, chief economist at Berenberg Bank in London. “Fast progress is essential to gradually rebuild the trust in government and confidence in the future that is needed for some of the capital outflows to be reversed and for the slump in investment to end.”

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On Notice: Greece’s Vested Interests

by Hugo Dixon

New York Times
September 16, 2015

One of the few near-certainties about Sunday’s general election in Greece is that it will produce a government committed, at least nominally, to the bailout agreement struck last month with the country’s creditors. Not only is former Prime Minister Alexis Tsipras a reluctant convert to the deal, which could make available 86 billion euros in new loans, the main opposition party, New Democracy, is prepared to back it, too.

A casual observer may think the bailout condemns Greece to more years of austerity. This is part of the story, but not its main aspect. Greece’s two previous bailouts sought to cut spending and raise taxes; insofar as they tackled special interests, they concentrated on limiting the power of organized labor. The thrust of the latest plan, in contrast, is to combat cheating and sweep away the privileges enjoyed by a wide swath of groups, including farmers, shipping magnates and pharmacists. Some of these are natural supporters of the former conservative-led coalition, which explains why it did not do more to curb their privileges (and why Mr. Tsipras, a leftist, sees some political mileage in doing so).

Affected groups may squawk, but the country will benefit. Prices will fall and consumer choice will increase as businesses respond to competition. And if the fight against tax evasion succeeds, honest citizens will no longer have to carry the burden of those who cheat.

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The Surprisingly, Almost Eerily, Calm Greek Election

by Aristides N. Hatzis

Wall Street Journal
September 16, 2015

On Sunday the Greek people are going to decide their future again. This is the country’s third election in less than eight months and the sixth in three years. For Greece, that isn’t unprecedented and certainly isn’t surprising. The country is in the midst of an economic crisis that saw per capita income fall by almost 28% between 2007 and 2015. That the despair and anger over this economic catastrophe will be decompressed through elections is a good thing.

It is remarkable that Greeks are heading to these elections calmly. The pre-election period hasn’t been too ugly or noisy, for several reasons. First, the radical left-wing Syriza party isn’t the opposition anymore, but the incumbent.

This has quieted what used to be a major source of electoral fireworks. Syriza has been torn apart after the administration’s capitulation to the eurozone leadership following a referendum that had instead mandated defiance, and Alexis Tsipras is now just another bailout-signing prime minister.

But the splinter party of dissenting former Syriza members is in danger of not reaching the 3% threshold required to be represented in the Parliament. It has failed miserably in its attempt to mobilize Syriza supporters, to exert a real pressure or to become a medium-size political player.

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Europe's Best Hope for Greece?

Bloomberg
Editorial
September 16, 2015

It wasn't so long ago that Alexis Tsipras was describing the International Monetary Fund as "criminal" and demanding that Germany pay war reparations to Greece. That he is now Europe's favored candidate for prime minister of Greece is a paradox that should reassure no one.

Whoever wins Sunday's parliamentary elections in Greece, the result will be unsatisfying unless both Greek and European leaders can get with a simple, straightforward program: No more muddling though. Either Greeks accept the painful reforms necessary to keep the country in the euro -- or they reject them, return to their currency and take full control of their economy.

That's not the choice Greeks will face this weekend. Tsipras and the leader of the establishment New Democracy Party, Evangelos Meimarakis, both offer qualified support for the bailout, and seem eager to change the subject. In a televised debate Monday night, the two men quarreled over which had the more feckless record.

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Q&A: What’s at stake when Greeks go to the polls... again

by Henry Foy

Financial Times
September 16, 2015

Greeks go to the polls on Sunday to vote in the country’s fifth parliamentary election in six years after last month’s collapse of its Syriza-led government.

Left-wing Syriza, led by Alexis Tsipras, and the centre-right New Democracy are neck-and-neck in the polls with about 26 per cent of the vote each, according to forecasts, well ahead of other rivals.

Wait, Greece is back in the news? I thought that problem was fixed?

Think again. Greece averted bankruptcy and a possible exit from the eurozone by agreeing to an €86bn bailout package from the EU and other creditors. However, the crucial financial injection came at a cost: a tough and intrusive reform programme that heaps further austerity on a country whose economy has shrunk by a quarter since 2010 and where almost a third of the population now live below the poverty line.

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Tsipras and Meimarakis go head-to-head in TV debate

by Kerin Hope & Henry Foy

Financial Times
September 15, 2015

The leaders of Greece’s two biggest political parties traded accusations of incompetence and corruption in a heated television debate on Monday evening, but neither politician emerged as a clear winner, according to local pundits.

Alexis Tsipras, the former prime minister, repeatedly put his conservative opponent Evangelos Meimarakis on the defensive, attacking the centre-right New Democracy party as responsible for “40 years of financial scandals while in power” that had benefited the country’s business and political elite.

Mr Meimarakis countered that Mr Tsipras’ Syriza-led government had managed to bankrupt Greece in just seven months — which led a smiling Mr Tsipras to reply that this was like “someone who drank three bottles of whisky and a shot of vodka then claiming it was the vodka that had given him a hangover”.

The debate was seen as critical for parties to rally undecided votes ahead of the September 20 election. The most recent polls show little to choose between Syriza and New Democracy, at about 26 per cent of the vote each, with the high number of undecided voters likely to be pivotal.

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Once Unthinkable, Economists Now Say Debt Relief for Greece Is a Given

by Andre Tartar

Wall Street Journal
September 15, 2015

What a difference two months make.

Back in July, things looked so bad for Greece that 71 percent of 31 economists polled by Bloomberg could see the country out of the euro by the end of 2016. Debt relief was a pipe dream for the EU's most indebted nation.

Fast forward to September, a similar survey shows that 94 percent of respondents think it's not only possible, but very likely. The sample of 36 economists was interviewed Sept. 4-11.

Debt relief — resisted for so long by Germany, the biggest contributor to the Greek bailouts — had been a loaded topic in months of brinkmanship between Greece and its creditors.

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Alexis Tsipras fights the enemy within: disillusion

by Henry Foy & Kerin Hope

Financial Times
September 14, 2015

When Alexis Tsipras last month called a snap election , the Greek prime minister enjoyed a comfortable lead over his political rivals. But there was one enemy he may have overlooked: disillusionment within his own voting machine.

Many of the young supporters who propelled the leftwing Syriza party to power nine months ago feel betrayed by Mr Tsipras’s compromises and broken promises. The premier came to office as a fire-breathing, anti-austerity campaigner but stood down as a subdued pragmatist.

Their disillusionment before Sunday’s ballot is undermining his re-election bid and threatening a return to power of the centre-right New Democracy.

“Of course he betrayed us,” said Maria Farou, a 19 year-old student in Athens. “I was very angry. And I still am.”

Like an overwhelming number of young Greeks, Ms Farou is a Syriza supporter who voted No in a July referendum, backing Mr Tsipras’s call to reject an EU bailout that would have imposed more austerity measures on Greece’s broken economy.

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Far-right Golden Dawn exploits darker side of Greece's discontent

by Karolina Tagaris

Reuters
September 11, 2015

Flaming torches raised, far-right Golden Dawn supporters dressed in black chanted the Greek national anthem as darkness fell on Thermopylae, where King Leonidas and 300 Spartans defied a vast Persian army in 480 BC.

Standing before them, a member of the European Parliament from Golden Dawn, the euro zone's most extreme right-wing political party, roused the crowd with defiant denunciations of enemies at home and abroad ahead of a national election on Sept. 20.

"The message of Leonidas - Molon Labe (Come and get it) - is as timely today as ever for everything tormenting Greece," the retired lieutenant general, Eleftherios Synadinos, told supporters waving flags bearing the party's Swastika-like emblem.

"We're not like everyone else with heads bowed down. We're upright, we're standing and the message will be delivered on Sept. 20 ... We must not surrender arms. We must not back down," he said, to which the crowd roared: "People! Army! Nationalism!"

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Leftier-than-thou

by Yannis Palaiologos

Politico
September 10, 2015

Greece’s long-anticipated campaign TV debate — the first between party leaders since September 2009, before the age of the bailouts — proved a mighty perverse affair.

Tight constraints on questions, follow-ups, who could speak to whom and for how long, were as frustrating for the seven candidates as for the journalists who participated on Wednesday night. And while the latter were well within their rights in voicing frustration with the droning, unenlightening three-hour affair, the former were not: Their staff had foisted the mind-numbing format on the viewing public. Of course, that didn’t stop politicians from complaining about it.

Despite all the cussedness, five key themes emerged from this stunted, uninspiring campaign.

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Breaking the Greek debt impasse

by Barry Eichengreen, Peter Allen & Gary Evans

Vox
September 7, 2015

Greece needs debt restructuring. Yet, to get debt reduction, the Greek government is required to implement structural reforms. This column proposes a way to square the circle by introducing a Structural Reform Index in Greek loan contracts. The central feature of the proposal is the linkage of debt relief to progress in structural reforms. The features and conditions of the proposal should make it desirable both for Greece and the German government and other creditors.

Greek debt restructuring and structural reforms

Greece needs debt restructuring. On this, a growing chorus of voices is agreed (Manasse 2015, Taylor 2015). Even the IMF (2015) now acknowledges that Greece’s debt is unsustainable. Restructuring is required, it now insists, for the workability of the third programme between the country and ‘the institutions’ that is currently being finalised.

Yet, the German government refuses to agree to debt reduction absent evidence of prior structural reform. Debt reduction should be a reward, it insists, for prior action on the structural front. If it is offered now, the Greeks will be let off the hook, and the incentive to proceed with hard structural measures will be blunted.

Greek politicians – and many of their voters – insist to the contrary that they deserve a credible promise of debt reduction and restructuring now. Absent such a promise, they are reluctant to commit to painful structural reforms. In the presence of a crushing debt burden, they argue that they have already suffered enough.

Others like the IMF, putting considerations of fairness aside, imply that the third adjustment programme is doomed to fail absent an up-front commitment to restructuring. The Fund appears to be prepared to condition its financial participation in that programme on a German concession on the issue.

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Centre-right level with Syriza in Greek polls

by Helena Smith

Guardian
September 6, 2015

The stage is being set for one of the most exciting elections in recent Greek history with polls showing the former ruling leftwing party, Syriza, running neck and neck with the centre-right New Democracy party barely two weeks before the snap ballot.

Alexis Tsipras’s surprise move to tighten his grip on power, with what he had hoped would be a fresh mandate to implement spending cuts and reforms, is now showing all the signs of having backfired. Diehard leftists, appalled by the anti-austerity movement’s spectacular U-turn, appear to be leaving Syriza in droves.

“It is going to be a thriller, and that means that when the day comes no result can be excluded,” Aristides Hatzis, a professor of law and economics and prominent political commentator, told the Guardian. “More than 60% of the undecided are Syriza voters. They feel disappointed, disillusioned and betrayed.”

Two opinion surveys published on Sunday depicted Syriza and New Democracy locked in a dead heat – a far cry from the walk in the park Tsipras envisaged when he called the vote days after signing up to the onerous terms of a third, €86bn (£63bn) rescue programme for the debt-stricken country.

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Syriza’s popularity wanes as key poll approaches

by Kerin Hope

Financial Times
September 6, 2015

Antigoni Kanelli says she voted for Greece’s leftwing Syriza party in January because she believed Alexis Tsipras’s promise to increase state pensions after five years of cuts that slashed her monthly income by more than one-third.

Now pensions are once again being reduced, this time to provide extra funds for the cash-strapped state healthcare service, while further cuts loom next year as Greece implements a €86bn new bailout programme agreed by Syriza with international creditors.

“I feel very disappointed . . . I thought Syriza was a different kind of party with a dynamic young leader who could stand up for Greece in Europe,” said Mrs Kanelli, a retired high school teacher. “But he’s [Mr Tsipras] turned out to be just like the old politicians . . . He’s certainly not getting my vote this time.”

Increasing numbers of Greeks seem to share Mrs Kanelli’s opinion. Support for Syriza has plunged according to opinion polls, triggering doubts over whether Mr Tsipras can fend off a rising challenge from the centre-right New Democracy party at a snap general election on September 20.

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The Foundations of Greece’s Failed Economy

by Edmund S. Phelps

Project Syndicate
September 4, 2015

Too many politicians and economists blame austerity – urged by Greece’s creditors – for the collapse of the Greek economy. But the data show neither marked austerity by historical standards nor government cutbacks severe enough to explain the huge job losses. What the data do show are economic ills rooted in the values and beliefs of Greek society.

Greece’s public sector is rife with clientelism (to gain votes) and cronyism (to gain favors) – far more so than in other parts of Europe. Maximum pensions for public employees relative to wages are nearly twice as high as in Spain; the government favors business elites with tax-free status; and some state employees draw their salaries without actually turning up for work.

There are serious ills in the private sector, too – notably, the pervasive influence of vested interests and the country’s business and political elites. Profits as a share of business income in Greece are a whopping 46%, according to the latest available data. Italy came in second at 42%, with France third, at 41%. (Germany’s share is 39%; the United States’, 35%; and the United Kingdom’s, 32%.) Insiders receive subsidies and contracts, and outsiders find it hard to break in. Astoundingly, young Greek entrepreneurs reportedly fear to incorporate their firms in Greece, lest others use false documents to take away their companies. According to the World Bank, Greece is one of the hardest places in Europe to start a business. The result is that competition for market share is weak and there are few firms with new ideas.

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Alexis through the looking-glass world of Greek politics

by Tony Barber

Financial Times
September 3, 2015

In the looking-glass world of Greek debt politics, everything changes from one year to the next and everything stays the same. Consider the snap election that takes place on September 20, hard on the heels of the country’s third financial rescue in five years. Latest opinion polls indicate that Alexis Tsipras, the leader of the leftwing Syriza party and former prime minister who triggered the election in a bid to strengthen his grip on power, is at risk of defeat. Yet will it matter? Whatever the result, the ravaged economy will remain suffocated by the same fog of illusions that enshrouds relations with its creditors.

Everything changed when Syriza took office in January on a wave of support for overturning the orthodoxies of eurozone financial and economic policy. After months of helter-skelter rule, and after breaking with his party’s dogmatic ultra-leftist faction, Mr Tsipras still finds it hard to suppress his distaste for these orthodoxies.

Yet everything is the same because Syriza signed up in July for a €86bn bailout from its European creditors. The government accepted a trade-off between financial aid and internationally supervised domestic reform — just as its centre-left, technocratic and centre-right predecessors did between 2010 and 2014. Mr Tsipras even relied on the parliamentary support of his centre-left and centre-right adversaries to legitimise the bailout. Hard-pressed Greeks can be excused for asking why it is necessary to elect a new parliament for the fifth time since October 2009, and what practical difference it will make to their lives if they vote for Syriza or any of its mainstream rivals.

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Greek opposition New Democracy party closes gap on Syriza

by Kerin Hope

Financial Times
September 3, 2015

Alexis Tsipras’s leftwing Syriza party is facing a backlash from dissatisfied voters as campaigning heats up for a snap general election on September 20.

Two opinion polls by Greek research companies published on Wednesday showed Syriza’s lead over the centre-right New Democracy party shrinking from 2.5 per cent to around to 1 per cent this week, following mass defections by central committee members and the party’s youth wing.

A third poll put ND ahead by a narrow margin for the first time since it was swept out of office by a Syriza landslide at the last general election, held in January.

A rebellion last month by hardline leftists in Syriza against Mr Tsipras’s decision to accept further austerity measures in return for a new €86bn rescue package prompted a split in the party and the formation of a new grouping, Popular Unity, which is campaigning on an anti-European platform.

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