Alberto Mingardi  

Another referendum for Mr Tsipras

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On July 5th, the Greek Prime Minister Alexis Tsipras polled his fellow citizen in a referendum on "austerity" and the then-available European deal. Since he has since subscribed to a more "austere" deal, Tsipras now has problems with his own party - Syriza, which is basically a patchwork of different extreme left groups.

The Wall Street Journal reports:

Greece's ruling Syriza party is sliding toward a split as far-left dissidents resist Prime Minister Alexis Tsipras's acquiescence to creditors' demands, endangering his fragile government and complicating the country's bailout negotiations.

Syriza's central committee--the body that sets the party's policies--is scheduled to meet on Thursday to decide how to handle a rift that erupted in mid-July, when a quarter of the party's lawmakers voted against austerity measures that were a prerequisite for the country's prospective new bailout program from the Eurozone and International Monetary Fund, valued at as much as €86 billion ($95 billion).


Now, this is not a very surprising outcome. "Syriza" campaigned over a complete "Grexit" from the world of adults, its members fantasised about overcoming capitalism and turning the Eurocrisis into the much-awaited time for a revolution. Apparently, Mr Tsipras ultimately came to think that the political costs of leaving the Euro weren't matched by much benefit and eventually agreed to a deal which includes reforms that looked incompatible with his party's agenda. The deal was labeled as "the terms of Greek surrender" by Yanis Varoufakis, who quit the government leaving Tsipras more room for negotiations.

It would be very interesting to see what may happen in Greece now. Mr Tsipras may not win his party over - which may spur a change in the governing majority, or new elections. The Greeks may infer from this that, via the deal, European leaders were meddling with their own democratic politics. The simple narrative is: Mrs Merkel didn't like Syriza, and now Syriza is gone. Conspiracy theories tend to be very complicated explanations for very simple phenomena. In this case, a party that was very heterogeneous and kept together by some promises that could not stand the test of reality is most likely to collapse "naturally", so to say. But true or false, the narrative of a European "coup" could be very influential in Greece and spur on a nationalistic uprising. The second referendum, the one inside Syriza, may be a turning point in the Greek crisis, more than the first one.


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CATEGORIES: Eurozone crisis




COMMENTS (2 to date)
Tom West writes:

I have always felt that he intended to "lose" the first referendum. That way, if his bluff failed and he had to submit, he could say that while he personally would have stood firm, he respects the people's choice to submit.

Now he's stuck between a rock and a hard place.

ThomasH writes:

The best choice would have been to leave the Eurozone, but now will be to have an IVA (rebated for exporters and tourist receipts) high enough to simulate the devaluation that leaving the Euro would have produced.

Maybe the best will still be chosen, just later with higher costs.

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