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Where is Odysseus? Part 4 - Unemployment and Employment
Broad impact of inflation crisis becoming clearer
Will Tsipras ride the waves in 2016?
Alexis Tsipras rode to power in 2015 on a wave of support that then threatened to engulf him. He somehow managed to survive but finds himself washed up on the beach and needing to secure his footing before the next waves come crashing down.
Tsipras started the year as the leader who would put an end to the Greek bailouts and the troika’s demands but has spent the last part of 2015 implementing the third memorandum he agreed with the country’s lenders.
Since the details of the new package were settled, the re-elected SYRIZA-led government has passed in Parliament measures that even the previous New Democracy-PASOK coalition had been reluctant to consider. This includes increases to healthcare contributions for pensioners, lifting the moratorium on home repossessions by banks, scrapping the lower VAT rate for certain islands, allowing the sale of some non-performing loans to distressed debt funds and paving the way for 49 percent of the power transmission operator (ADMIE) to be sold to private investors.
On top of this, the government has also completed two privatisations launched by the previous conservative-socialist alliance: The sale of the Greek Horseracing Organisation (ODIE) and the 40-year deal with German firm Fraport to manage 14 regional airports.
These were decisions that Tsipras and his ministers had never expected to make but, surprisingly, they have done so with relatively little fuss. It is true that the government has lost two MPs and had to replace another but under normal circumstances adopting even one of these measures would have been enough to bring SYRIZA to its knees.
Tsipras’s main concern, though, is that his parliamentary majority has been weakened to just three seats (153/300) before the toughest measures have been discussed in any detail.
Pension reform, an overhaul of the tax system and the sale of the remaining non-performing loans, including those linked to primary residences, are the most challenging issues that the Greek government will have to address in the coming weeks. The first review of the third bailout is due to begin in mid-January and the aim is to agree on the details of all these issues within a few weeks after that.
Tsipras will again come face to face with his previous pledges, such as the one not to reduce pensions. The government is working on a formula that would rely on increases to social security contributions rather than cuts to retirement pay but it remains to be seen if the quadriga of lenders agrees. Farmers, meanwhile, have already started protests because of the plans to increase their taxation from next month. Any suggestion that foreign funds will be allowed to buy at knock-down prices the overdue mortgages of Greek homeowners will also prompt demonstrations.
The two questions that Tsipras will have to find answers to from January onwards are whether his MPs can stomach more measures, especially such unpopular ones, and whether his government can discover the technical capacity to implement the reforms the country needs.
European officials have been mostly positive about the level of cooperation with the government since the September 20 elections but there are doubts about whether it has the stamina, the know-how and the personnel to make the necessary moves in tax collection, public administration, healthcare, education and the justice system, to name a few.
The government gives the feeling that as far as the civil service is concerned, it is content to replace key staff appointed by previous administrations with candidates of its own choice, rather than those who are most skilled to do the job. If this is the case, the government’s ability to drive change will be non-existent.
It will also hamper Tsipras in his efforts to tackle day-to-day tasks, such as responding to the changing nature of the refugee crisis, which is the other major challenge that lies ahead. So far, Greece’s task in addressing the huge influx of refugees and migrants (more than 800,000 this year compared to 43,500 in 2014, according to the UNHCR) has been focussed on the humanitarian aspect: Rescuing, sheltering, feeding and providing medical assistance. Gradually, though, the emphasis has shifted to the administrative: Fingerprinting, registering, processing, relocating and repatriating.
While the humanitarian effort has already placed a huge burden on Greece, which it has only been able to lift with the help of NGOs and volunteer groups, the administrative tasks are making different demands of the Greek government. They require planning, coordination and management, all of which are skills that the current coalition and the Greek civil service are known to lack.
The tighter border controls north of Greece mean that many migrants cannot find a way through to central and northern Europe. Greece is expected to detain them and send them home. At the same time, it has been asked to keep refugees at the so-called hotspots on the Greek islands until they have been relocated. This means finding places for thousands of people to stay in the country for several weeks at a time, at least as the relocation process is moving at a snail’s pace and the repatriation of migrants is a notoriously complex exercise.
This has already created problems for the government as it moves hundreds of migrants from one former 2004 Olympics Games stadium to another, while it tries to find a more organised and permanent solution to a challenge that will only intensify in the months ahead. It also means that a problem which until now had been limited to the islands and border areas is now starting to have an impact in the city, which creates a different set of political complications: Friction with mayors and residents, as well as more opportunities on which extremists can capitalise.
Tsipras has performed a remarkable political survival act this year but the growing pressure from the bailout reforms and the migratory flows means that his toughest tests lie ahead. Will he and his government survive the impact or will they be swept away because their capacity to confront such weighty challenges is too limited? We will discover the answers in the next few months.
*This article first appeared in German on Die Zeit's website.
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