Greek Political Instability Increasing


Thought It Was Safe to Forget Greece? Think Again – Bloomberg.

Greece has held two elections since the beginning of the debt crisis but not much has changed politically. The establishment party that fudged government fiscal figures for years is in charge leading a coalition of the remnants of the other surviving establishment parties, PASOK and the Democratic Left.

These parties have refused to prosecute those responsible for Greek’s current predicament, because they are important allies. In the meantime, the coalition is accepting bailout money and paying off key constituents whether they be banks or government employees.

Support for the government has reached an all-time low with Prime Minister Samaras’ New Democracy barely registering 20% in the polls. Leading opposition party Syriza is comfortably ahead with 27%. If elections were held today, Syriza would get first crack at forming a governing coalition.

A civil war has begun in Greece. The homes of five  journalists supposedly in the pocket of the government were bombed last week. A bullet was fired into Samaras’ New Democracy headquarters office a few days ago. In December, there was an assassination attempt on Syriza’s number two official. Thugs attack immigrants on a daily basis.

With the increase in instability, one would think that the time is ripe for Syriza’s leader, Alex Tsipras, to make a move; however, Syriza is doing fine with the current status quo.

In football, there is a saying that the most popular player on a bad team is the second-string quarterback, and that is exactly the position that Tsipras finds himself. The coalition keeps voting for the laws necessary to continue getting money from the troika and is taking all of the blame for Greece’s current situation. He gets to blame the government for everything and gets to be Mr. Popular. He has no reason to make a power play, yet.

That day is coming. Once Greece obtains the next couple of tranches of aid, it could be time to make a move.

My thinking is that Tsipras will continue biding his time. After German elections, Greece’s paymasters will not have as much reason to keep saying, “Nein.” Political posturing will more quickly yield to the exigencies of the situation. At this point, he will have much more leverage to demand “adjustments” to the bailout program.

Syriza will continue making hay out of the Lagarde List and the other foibles of the current government. In a few months, he will make his bid to lead the government. Let’s say in the summer. Then, he will be in perfect position to blackmail the troika by the threat of a default and Grexit. As long as the cost of a Grexit remains higher than debt forgiveness or other concessions he requests, the Germans will say, “Ja.”


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