Alexis's choice

Agora Contributor: Nick Malkoutzis
Photo by Die Linke via Flickr
Photo by Die Linke via Flickr

Alexis Tsipras seems to have chosen his path. Whether he will manage to reach the end of it is another matter, but the prime minister’s decision to shake up Greece’s negotiating team and to issue a common statement with European Commission President Jean-Claude Juncker last week made it clear that he prefers the option of agreeing with lenders rather than being left in limbo, or worse.

Securing a deal will be some feat. The suggestion last week that the red lines on pensions and labour market reform may be crossed would mean Tsipras entering treacherous territory. It is worth remembering that less than six months ago, his predecessor Antonis Samaras was unwilling – or not able – to pass pension and labour reforms through Parliament, triggering the early presidential election and national vote.

If Tsipras is somehow able to agree to a package that includes policies in these two areas, but is also able to pass it through Parliament and keep his government intact, he will have perhaps completed the most impressive balancing act in modern Greek political history. Whether he is able to do it will depend on the content of the agreement. If most of the measures agreed are seen as restoring fairness in the way that the burden of Greece’s fiscal and structural adjustment is shared, he will have some grounds to argue with SYRIZA MPs and members that the compromise is worth making and the anxiety of the last few months has not been in vain.

However, while the party may accept some of the measures – even the creation of a single VAT rate of around 18 percent for almost all goods and services – it is difficult to imagine SYRIZA’s most radical personalities sitting back and accepting changes that will affect the majority of pensioners or working Greeks. There is a world of difference between slashing high-end supplementary pensions and having to implement a zero deficit rule that will lead to all of these auxiliary payments being cut or abolished – even though the vast majority come to less than 200 euros per month.

Once Tsipras and his party go behind closed doors to mull the details of an agreement with the institutions (if one actually comes about), there can be no guarantee of what state they will be in when they come out. There may be a mass walkout, or a few of the more principled or ideologically driven MPs could decide to turn their back on the prime minister. The first scenario would probably lead to the collapse of the government (Tsipras is unlikely to turn to PASOK or Potami to save his administration), while the second would allow the wounded prime minister to hobble on. The third option of holding a referendum to throw the decision back to the Greek electorate is a popular idea among many within SYRIZA but is unlikely to be a risk that Tsipras wants to take.

A poll by the University of Macedonia last Monday indicated that 55 percent of Greeks would vote to stay in the euro even if it meant accepting the conditionality of a third bailout. Theoretically, a “yes” vote in a referendum would allow Tsipras to politically outmanoeuvre his party’s left wing if it refuses to back the agreement with lenders. In reality, though, it would undermine the government for months, if not years, to come.

It must have dawned on Tsipras and his aides by now that there is no way to hold a referendum in Greece over the next few weeks and keep the banks open. Even if Tsipras emerges from a referendum with the result that he wants, the country will have to live with the consequences of capital controls for some time to come (Cyprus needed two years before it could lift them). For an economy that is in such a fragile state and so reliant on cash, imposing capital controls would be the equivalent of trying to drive a three-wheeled car uphill with the handbrake on.

The next few weeks will be a severe test for Tsipras, his party, government and country. A few days ago, it was the fifth anniversary of former Prime Minister George Papandreou’s announcement on the tiny island of Kastellorizo that Greece was going to activate the first memorandum of understanding with its international creditors. During those five years, Greeks have been to hell and back numerous times. Finding themselves on the precipice again after such torment, heartbreak and hope does nothing for the country’s collective mental state.

There does not seem to be anything gained by passing the responsibility for excruciating decisions back to beleaguered Greek voters. They have already made many tough decisions over the last few years, such as how to cut their spending, whether to move back in with their parents, if they should keep going to work despite not being paid for months, whether to stay in Greece or emigrate, and who to vote for. Now it’s the turn of the country’s elected representatives to pick up the slack. Tsipras appears to have made his decision. Now, it’s up to others.

*Follow Nick on Twitter: @NickMalkoutzis

This artcile appeared in last week's e-newsletter, which is available to subscribers via the site or our free mobile apps.

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