Greece’s new government promises tax cuts and spending increases

Economist
July 29, 2019

Over the past decade Greece has not been the easiest place for politicians who want to be liked by voters. The newly elected centre-right government is trying its best. In his first few weeks in office Kyriakos Mitsotakis, the prime minister, has announced tax breaks for ordinary Greeks as well as for corporations. He has promised not to cut social benefits or fire any public-sector workers. Jobs are being created in areas that suffered deep cuts during the country’s eight-year crisis: the health ministry is preparing to hire 2,400 hospital workers and another 1,500 police officers are being recruited.

Sadly, the good times are not guaranteed. The prime minister’s policy choices could derail Greece’s chances of hitting tough budget-surplus targets set by its creditors, the European Union and the International Monetary Fund. Economists fear that the relatively inexperienced Mr Mitsotakis—he held a fairly junior ministerial post from 2013 to 2015—may be overestimating his government’s capacity to shake up the country’s sleepy bureaucracy and push through reforms.

So far the markets have given Mr Mitsotakis and his New Democracy party a vote of confidence. On July 16th Greece issued its first seven-year bond since 2010. A modest target issuance of €2.5bn ($2.8bn) was hugely oversubscribed: offers exceeded €13bn, pushing down the yield on the new bond to 1.9%. Greece now borrows at the same rate that Italy does.

Winning over the EU and the IMF will be harder. Asked about the new Greek government at her annual summer press conference, Angela Merkel, the German chancellor, called the bond issue “very positive” but sounded a note of caution: “We will have to see how things evolve.”

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Can This Ancient Greek Medicine Cure Humanity?

by Frank Bruni

New York Times
July 26, 2019

Over my 54 years, I’ve pinned my hopes on my parents, my teachers, my romantic partners, God.

I’m pinning them now on a shrub.

It’s called mastic, it grows in particular abundance on the Greek island of Chios and its resin — the goo exuded when its bark is gashed — has been reputed for millenniums to have powerful curative properties.

Ancient Greeks chewed it for oral hygiene. Some biblical scholars think the phrase “balm of Gilead” refers to it. It has been used in creams to reduce inflammation and heal wounds, as a powder to treat irritable bowels and ulcers, as a smoke to manage asthma. I’m now part of a clinical trial in the United States to determine if a clear liquid extracted from mastic resin can, through regular injections, repair ravaged nerves.

That would have profound implications for millions of Alzheimer’s patients, stroke survivors — and me. The vision in my right eye was ruined by a condition that devastated the optic nerve behind it, and I’m at risk of the same happening on the left side, in which case I wouldn’t be able to see a paragraph like this one.

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Has Greece found the formula for defeating populism?

by Aristides N. Hatzis

Washington Post
July 16, 2019

Greece has a new prime minister. Kyriakos Mitsotakis took office immediately after leading his conservative New Democracy party to a landslide victory in the country’s general election on July 7. His dramatic victory ended 4½ of government by Alexis Tsipras and his far-left Syriza party. And that’s why the significance of this election extends well beyond Greece: Mitsotakis has shown how a traditionally oriented party can take on populists — and defeat them.

Syriza’s left-wing populism was based mostly on anti-market bias, a bit of technophobia and a strong measure of social envy. This kind of populism can be defeated relatively easily in liberal democracies — simply because the numbers don’t add up. That leaves a government of the type led by Syriza with two options: it can either succumb to its own anti-establishment paranoia or opt for pragmatism. Tsipras ultimately tried both, neither very convincingly. The voters didn’t appreciate the blatant contradiction and grew impatient with the anemic growth. In the end, they abandoned him for Mitsotakis, the quintessential anti-populist.

The first blow to Tsipras came after an ill-advised referendum in 2015 when Greek voters, reeling from the country’s financial crisis, had the chance to take a stand on a proposed European Union bailout package. (Sixty-one percent voted “no.”) Tsipras’s plans failed miserably, and the episode transformed the prime minister from a radical naysayer into a compliant enforcer of the E.U.'s tough conditions. He ended up resorting to a left-wing populist ploy: hitting the middle class with tax increases to offer handouts to groups he groomed as his core supporters. This small-scale redistribution was not as successful as he hoped. The fierce backlash from middle-class voters led to his eventual demise.

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Kyriakos Mitsotakis: the new Greek PM hits the ground running

by Helena Smith

Guardian
July 13, 2019

It’s been barely a week but Greece’s new prime minister, Kyriakos Mitsotakis, has hit the ground running. Assuming power on Monday, the New Democracy leader announced parliament would not be going into recess for the summer: there was no time to waste, and bills had to be drafted.

By Wednesday, as his cabinet of established politicians, technocrats and ex-socialist reformers convened for the first time, the philosophy of his centre-right government became clearer still: ministers would not only set targets, they’d be monitored too. Placed before them were blue folders containing benchmark goals. As in any good business, progress reports would have to be kept.

In an era where appearance is everything, Mitsotakis, a former banker, has gone out of his way to set a new tone after four-and-a-half years of often rollercoaster rule under his leftwing predecessor Alexis Tsipras.

Police vans and barriers – which had come to represent the Tsipras government’s fear of protest – have been removed from the road approaching the prime minister’s office.

For many Greeks the new style is not just symbolic. Their first post-bailout government is viewed as the beginning of a new era; the crossing of a psychological threshold after a decade of austerity-driven depression, bailouts, extremist splinter groups and near bankruptcy on the frontline of Europe’s debt crisis.

“What we are seeing is a fresh generation of politician, Harvard-educated, result-oriented and with a more technocratic approach coming to the fore,” Pantelis Kapsis, a prominent political journalist, says of Mitsotakis.

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European democracy began in Greece. Thanks to its voters, it won’t die there.

Washington Post
Editorial
July 12, 2019

European Democracy began in Greece; some say it almost ended there, too. About a decade ago, as the world reeled from the financial crisis, Athens’s official financial data were shown to be badly misstated. In truth, the country was nearing insolvency, with potentially catastrophic consequences not only for Greece but for the 18 other countries that use the common currency, the euro. As the country spiraled into depression and chaos, it seemed ripe for the taking by extreme populists of the right and left. And, indeed, a far-left political neophyte, Alexis Tsipras, did win the prime ministership in 2015, promising to defy Greece’s international creditors and carry out revolutionary change.

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.

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Greek bond yields dip even lower than US Treasuries

by Robin Wigglesworth

Financial Times
July 10, 2019

Greece’s borrowing costs have tumbled to a record low — dipping below even the US — thanks to rising hopes of a renewed bond-buying programme from the European Central Bank and the centre-right New Democracy party’s sweeping victory in elections last weekend.

This marks a stark turnround for Athens, which underwent the world’s biggest government bankruptcy in 2012 and is still labouring with one of the largest debt burdens, at about 180 per cent of gross domestic product.

ECB president Mario Draghi has stirred expectations that the eurozone’s monetary authority is set to ease policy, hopes that were reinforced last week by the nomination of the IMF’s Christine Lagarde as his successor.

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Greece voted populism out. Now it has to make sure it doesn’t return.

by Yannis Palaiologos

Washington Post
July 10, 2019

Sunday’s parliamentary elections amounted to a stinging defeat for both left and right populism in Greece. After a long slog in bailout purgatory, and 4½ years under a populist government of the hard left and the nationalist right, Greeks turned decisively to the establishment center-right New Democracy party, led by Kyriakos Mitsotakis. Now it is up to the new prime minister to deliver the reforms that will permanently consign the forces of extremism to the margins.

Ousted prime minister Alexis Tsipras, leader of the leftist Syriza party, came to power promising to end austerity and rid the country of the endemic corruption of the old political system. Tsipras’s defeat is a testament to his failure on both those fronts — and indicative of the struggles of populists everywhere to turn their simplistic and overblown campaign rhetoric into practical political reality.

Sunday’s returns were also disastrous for the Golden Dawn, a racist party with Nazi roots that became Greece’s third-largest party in 2015, even though its leaders had been arrested for running a criminal organization. (The trial is still ongoing.) This time, the group failed to cross the 3 percent threshold and make it into Parliament.

It was another sign of the resilience of Greek democracy, which was severely tested by the deepest depression ever faced by a developed country in peacetime, in a period of resurgent authoritarianism in Europe and the world. As the various populist myths about the causes and possible solutions to Greece’s crisis have been revealed as delusions and outright lies, the fuel that sustained extremism has been depleted.

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Greece’s Experiment With Populism Holds Lessons for Europe

by Matina Stevis-Gridneff & Steven Erlanger

New York Times
July 9, 2019

With a quiet handshake at the door of Maximos Mansion on a tree-lined street in central Athens, Alexis Tsipras ceded the office of prime minister on Monday to the New Democracy leader, Kyriakos Mitsotakis.

It was the kind of uneventful handover of power that heralded Greece’s return to normality after being ground zero of one of the most tumultuous periods in global economic history.

The election victory on Sunday by a traditional center-right party was the end of Greece’s flirtation with radical left-wing populist politics, even as the radicals of Mr. Tsipras’s Syriza party transformed themselves into a mainstream force of the center-left.

The Tsipras experiment may hold important lessons for Europe and its new ranks of anti-establishment populists. While many, as in Italy, gleefully thumb their noses at the European Union and its rules, once in power the risks of following through on their rebelliousness may corral them from the extremes.

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Good news — and bad news — from Greece

by Anne Applebaum

Washington Post
July 9, 2019

It may have been the worst recession to hit any economy in modern times. Between 2007 and 2014, Greece lost a quarter of its economy; hundreds of thousands of people moved abroad; unemployment peaked at almost 28 percent, hitting nearly 1 in 3 of the working population. Extremist parties of the far left and far right came to power, railing against shadowy foreign enemies, spinning dark conspiracy theories and making impossible promises.

Under their leadership, the crisis grew worse. In the summer of 2015, the Greek government, led by a former young communist, Alexis Tsipras, nearly crashed out of the euro, the common European currency. Tsipras called a defiant referendum that rejected the terms of the bailout proposed by the European Commission, the European Central Bank and the International Monetary Fund, as well as the budget austerity that it required. There were rumors of military coups and the beginnings of a financial panic. In a stunning reversal, Tsipras threw in the towel a week later and accepted the terms anyway.

And then, somehow … it worked. The Greek economy turned the corner. Last summer, the country graduated from the European bailout program after eight years. Growth has returned, slowly. Unemployment is decreasing, also slowly. Most of all, democracy, though severely challenged, did not collapse, and that meant that alternative visions for the country’s future were allowed to gain strength. Greeks began asking if there weren’t better ways to run the country, and began tossing around words like “liberalism,” even “neoliberalism.” Now they might get to try some of them.

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New Greek government vows to get economy moving after election win

by Kerin Hope

Financial Times
July 8, 2019

A triumphant Kyriakos Mitsotakis was sworn in as Greece’s new prime minister on Monday after leading his New Democracy party to a resounding election victory.

“The people of Greece gave us a strong mandate yesterday to change this country. We will honour it to the full. The job begins today and I am absolutely certain we have the capacity to complete it,” Mr Mitsotakis said as he took the oath of office on a bible proffered by Archbishop Ieronymos of Athens, head of Greece’s Orthodox church.

The son of a centrist prime minister who tried unsuccessfully to reform Greece in the 1990s, Mr Mitsotakis has much to prove following Sunday’s convincing win. As a New Democracy MP he was rarely considered for even a junior minister’s post, even though he belonged to a powerful political dynasty. Now he has earned the top job by dint of his own efforts.

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The Rapid Fall of the Left

by Yascha Mounk

Atlantic
July 9, 2019

A few short years ago, the far left was resurgent. Fringe politicians such as Britain’s Jeremy Corbyn, Greece’s Alexis Tsipras, and France’s Jean-Luc Mélenchon were turning into the standard-bearers of the mainstream left. Meanwhile, in the United States, Bernie Sanders was staging a surprisingly robust primary challenge against Hillary Clinton, the anointed heir to the Democratic Party.

Progressive commentators, activists, and politicians argued that the far left was about to conquer Europe, and that the best way forward for Democrats was to ride the red wave to victory. “Jeremy Corbyn has given us a blueprint to follow for years to come,” wrote Bhaskar Sunkara, the founder of Jacobin. Representative Ro Khanna, the leader of the Justice Democrats in the House, argued that the populist message adopted by leftist leaders in Europe “is not just morally right—it’s also strategically smart.”

But reports of socialism’s resurrection were greatly exaggerated. Recent electoral defeats in Europe suggest that the much-heralded red wave crested before it reached the shore.

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Greece Is the Good News Story in Europe

by Roger Cohen

New York Times
July 8, 2019

If you’re looking for an optimistic story in Europe, try Greece. Yes, you read that right. Having lost a quarter of its economy in a devastating recession, Greece has turned the corner, its democracy intact, its extremist temptations defeated and its anti-Americanism defunct.

The landslide election on Sunday of Kyriakos Mitsotakis, the dynamic leader of the center-right New Democracy party, marked the end of a chapter. Greece rejected Alexis Tsipras, the leftist leader who took the country to the brink of ruin in 2015 before discovering a pragmatic streak. It also voted the neo-Nazi Golden Dawn out of Parliament. At the height of the crisis, Golden Dawn had become the country’s third-largest party.

First into populism, Greece is now first out. For a country in free fall, the anchors of the European Union and NATO are not so negligible after all. Europe is not simply a story of growing nationalism and xenophobia. It’s a continent in violent flux, torn between liberal democratic and nativist currents.

Despite unemployment that reached almost 30 percent, a chaotic near-exit from the euro, huge bailouts to save it from bankruptcy, mandated austerity programs and a wave of desperate refugees from Syria, Greece stabilized itself. It’s a reminder that reports of democracy’s demise are exaggerated.

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Kyriakos Mitsotakis sweeps to victory in Greece

Economist
July 8, 2019

Greece's center-right New Democracy party (ND) comfortably won a snap general election on July 7th, capturing 39.9% of the vote to 31.5% for the left-wing Syriza party of Alexis Tsipras, the current prime minister.

The result fell short of the sweeping victory for ND predicted by some pollsters, but gives the conservatives a workable overall majority with 158 seats in the 300-member parliament, thanks to a bonus of 50 seats that is awarded to the party that wins the most seats under Greece’s modified proportional representation electoral system. Syriza will have 86 seats.

This means that Kyriakos Mitsotakis, the ND leader, has enough seats to govern without having to form a coalition, unlike his predecessors as prime minister during the Greek debt crisis that has consumed the past decade.

The former McKinsey consultant has bold plans to overhaul the country’s creaking bureaucracy, attract foreign investment and create enough new jobs to stem the exodus of skilled young workers. He will face opposition from Syriza’s placemen in the civil service and regulatory bodies. Yet some worry that when Mr Mitsotakis’s political honeymoon is over, old rivalries and clientelism in ND will resurface and undermine his efforts to reform. Others see him as just the latest manifestation of the old dynastic establishment that got Greece into trouble in the first place. He is the son of a previous prime minister; his older sister served as mayor of Athens; and the mayor-elect of Athens is her son.

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Greece’s centre-right on course for snap election victory

by Kerin Hope

Financial Times
July 7, 2019

The traditional centre-right party is set to regain power in Greece after a sweeping general election victory, raising hopes of a return to growth and stability in a country rocked by years of recession and three international bailouts.

Kyriakos Mitsotakis’s New Democracy party was forecast to win 38-42 per cent of the vote, according to exit polls, compared to 26-32 per cent for the leftist Syriza party of Alexis Tsipras, the prime minister.

Mr Mitsotakis, a US-educated McKinsey alumnus and son of a former prime minister, said he would focus first on cutting taxes, reducing red tape and attracting foreign investment to create jobs and stem migration abroad by skilled young Greeks.

The result is a heavy blow for Mr Tsipras, the one-time radical firebrand who abruptly reversed his policy stance and adopted a harsh austerity programme in return for an €86bn bailout after Greece came close to crashing out of the eurozone in 2015.

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Let down by government, Greek voters expected to replace Tsipras with centre-right

by Jessica Bateman

Independent
July 6, 2019

There’s a general election in Greece on Sunday but, aside from a few roadside posters, it would be easy for visitors to pass through without realising.

In contrast to the huge demonstrations that were broadcast on news stations around the world when the current ruling party – radical leftists Syriza – swept to power in 2015, everything feels remarkably subdued.

The current government, lead by charismatic Alexis Tsipras, rose to power with a populist, anti-establishment message several years into the financial crisis that has engulfed Greece for a decade.

However, he disappointed many of his supporters when he ignored the results of a referendum on a bail-out package and adopted the same austerity policies he had previously stood against. Now it looks as though the country’s traditional centre-right party, New Democracy, will take power, having won the highest vote share in the recent European and local elections.

“Syriza supporters are disappointed, New Democracy voters are not too enthusiastic about voting New Democracy, and everybody knows the result already,” said Aris Hatzis, a political commentator and professor of philosophy and law at the University of Athens.

“The only question is whether they will get a majority or form a coalition government.”

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People’s anger over 2018 wildfires weighs on Greece elections

by Kerin Hope

Financial Times
July 6, 2019

In a defiant general election campaign that ends on Saturday, Greek prime minister Alexis Tsipras has robustly defended some divisive decisions taken over more than four years in power — from a treaty struck with North Macedonia to pension reforms agreed with the country’s bailout creditors.

But Mr Tsipras has been far less comfortable on one issue that is adding to public discontent and his likely crushing defeat on Sunday: his government’s response to a devastating inferno in July 2018 at Mati, a summer resort near Athens.

High winds drove a fire that caused 102 deaths, the worst recorded toll in a Greek wildfire. Two inquiries by Greek prosecutors and international disaster prevention experts pointed to a fatal lack of co-ordination between emergency services.

As the election campaign drew to a close this week Mr Tsipras —whose Syriza party is around 8 percentage points behind the opposition centre-right New Democracy in polls —was asked again about Mati in a television interview. He sparked a storm of tweets demanding he apologise publicly for the government’s chaotic reaction after he tried to fend off questions and said officials at first failed to inform him about casualty numbers.

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Resurgent centre-right party poised for victory in Greek election

by Helena Smith

Guardian
July 5, 2019

As the sun sets over the Acropolis, bathing the monument in the gentle light of a dying day, Kyriakos Mitsotakis ascends the podium, punching the air in jubilant mood. The backdrop may be antiquity’s most famous site but before him is a sea of blue and white, the colour of the Greek flag being waved by the crowd.

The man poised to become Greece’s next prime minister takes in the scene. “On Sunday Greece will become blue, the blue of the sky, the blue of the sea,” he thunders. “On Sunday we vote, on Monday we turn a page.”

Three days before snap elections, the opposition leader is on a roll. Democracy can produce unexpected results but every analyst agrees this is an election of foregone conclusion.

All polls point to victory for Mitsotakis’s centre-right New Democracy, with most suggesting the party is on course to win an outright majority in what would be a significant shift for a country governed by fragile coalitions for the past decade.

On Thursday, a Pulse survey showed the conservatives leading the leftist Syriza by eight percentage points. If so, New Democracy would acquire between 155 and 159 seats in the 300-seat parliament repeating its spectacular performance in the European election in May which prompted the prime minister, Alexis Tsipras, to call the vote three months ahead of schedule.

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The end for Alexis

by Kerin Hope

Financial Times
July 5, 2019

It’s almost unheard of for Greece to hold an election in July and Kyriakos Mitsotakis, leader of the centre-right New Democracy party, is worried that his voters may decide to head for the beach instead of the ballot box.

At every campaign appearance, from neighbourhood café debates to television interviews, Mr Mitsotakis makes a point of reminding conservatives they should turn up to vote in the country’s general election on Sunday.

Opinion polls suggest he doesn’t need to fret. Almost every published poll during the campaign has given ND a lead of between 7.5 and 10 percentage points over the ruling leftwing Syriza party of Alexis Tsipras, Greece's current prime minister.

If the polls are right, the conservatives would score an outright majority, winning between 153 and 164 seats in the 300-member parliament.

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Europe Tamed a Populist and Now He’s Paying the Price

by Eleni Chrepa & Paul Tugwell

Bloomberg
July 5, 2019

Michalis Asikis and his brother aren’t your typical shoe-store owners, at least by most standards. One uses time away from the shop to teach at a music school while the other heads off to taxi tourists.

In Greece, though, scratching a living from multiple sources isn’t unusual nowadays. The struggle to make ends meet or keep businesses on life support has become the norm for many Greeks, despite the promise by Prime Minister Alexis Tsipras that “hope is coming” when he surged to power in 2015. Indeed, to avoid shuttering his store in the northern town of Florina, Asikis has resorted to borrowing from family.

“People believed in Tsipras’s central slogan and not only didn’t hope come, there was also great disappointment,” Asikis, 47, says at his outlet on Florina’s main commercial street, which is littered with empty stores. “It’s like telling a kid that you will get them an ice cream and ending up giving them nothing, not even chewing gum.”

Such disillusionment is the harsh reality for Tsipras as he heads into elections on Sunday. While he managed to restore faith in Greece internationally, he lost it at home as his fresh face came to represent more of the same to a jaded nation. Opinion polls show power is likely to return to New Democracy, one of Greece’s two traditional parties of government, and back to the dynastic politics that Tsipras and his Coalition of the Radical Left vowed to break.

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In Greece, politics is a family affair

by Maria Petrakis

Politico
July 5, 2019

There may be no better place to understand Greek politics than the region of Achaia. Perched at the top of the Peloponnese peninsula west of Athens, it’s home to the country’s third-largest city — the bustling port city of Patras, famous for its annual Carnival parade, with its colorful costumes and floats.

It’s also the setting of a showdown between Prime Minister Alexis Tsipras, the head of the radical-left Syriza party, and the man who will almost certainly become the Greece’s next prime minister, Kyriakos Mitsotakis, leader of the center-right New Democracy party.

In last month’s European Parliament election, Achaia — a Syriza stronghold — was one of just two constituencies in the country where New Democracy didn’t rake in the most votes. As Greeks return to the polls to elect a new government Sunday, Tsipras and Mitsotakis have both decided to lead their tickets in the region.

The outcome of the contest will determine not just Greece’s direction over the next four years. It will likely see the restoration of one of the country’s most powerful political families — after more than a decade of political and economic turmoil following the onset of the 2008 financial crisis.

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Greek election: Why frustrated young voters are turning conservative

by Jessica Bateman

BBC
July 1, 2019

Like many young Greeks, Tasos Stavridis plans to leave the country once he finishes his degree in political science.

"Our financial crisis has gone on much longer than we expected and we are so exhausted," says the 22-year-old.

His generation has been severely impacted by the country's decade-long financial crisis.

With a youth unemployment rate of almost 40%, between 350,000 and 400,000 graduates have emigrated since 2010.

"Most of my friends plan to leave too. In Greece the salaries are so low, and the economic situation is so bad," Mr Stavridis complains.

As Greeks prepare for a general election on 7 July, he and his peers are not backing a radical, youth-orientated party, such as the current-ruling Syriza which swept to victory in 2015.

In last month's European elections, the majority of 18- to 24-year-old voters (30.5%) backed New Democracy (ND), the traditional centre-right party widely considered partly responsible for the very crisis that still impacts them.

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