He came to power vowing a debt revolution, but after a roller-coaster year of economic meltdown forcing him to abandon his election promises, a less bouncy, but still charismatic Greek Prime Minister Alexis Tsipras is facing the music.
His leftist government has been whittled down to a parliamentary majority of three, his popular appeal is slipping and Greece’s international creditors do not seem to share his urgency for a debt deal to kick-start the nation’s recovery.
Tomorrow, Greece marks a year under the first leftist government in its history. Today, Tsipras is due to address his party in a celebratory speech, promising that the upturn is just around the corner.
“I believe 2016 will be the year that Greece will surprise the world economic community,” Tsipras told Bloomberg TV in Davos, Switzerland, this week. “I’m confident that all our partners want a successful and timely concluded review because they can understand that time is part of our strategy. If we manage to do it the sooner we’ll leave the vicious circle and come back to growth soon.”
Tsipras was elected in January last year after persuading Greeks that they no longer had to grovel to foreign powers for their economic survival. He argued that debt-hit Greece would never recover if it continued to be tied to international bailouts focused on spending cuts and tax increases. He promised to aggressively broker a new economic deal.
Within weeks, Tsipras and firebrand then-Greek minister of finance Yanis Varoufakis had knocked heads with the nation’s creditors — the EU, European Central Bank and the IMF — and the stage was set for six months of acrimonious talks that nearly saw Greece pushed out of the eurozone.
It was not until July last year that Tsipras — staring into the unknown and a possible return to the drachma — ditched Varoufakis and signed another economic rescue for 86 billion euros (US$93 billion) accompanied by more spending cuts.
The decision split his SYRIZA party and the Tsipras government resigned, but the adroit former student sit-in leader weathered the storm and got himself re-elected in September last year, albeit with a reduced majority.
Still in an improbable coalition with the nationalist Independent Greeks party, Tsipras now has 153 lawmakers in the 300-seat parliament.
Few expect his administration to complete its four-year term and he faces an imminent challenge in implementing an unpopular pension and tax overhaul mandated by Greece’s three-year bailout.
Opinion polls for the first time show SYRIZA falling behind the conservative New Democracy party, which has elected a liberal reformer as chief.
However, analysts argue that with an unprecedented refugee challenge on the EU’s doorstep and Britain threatening to leave the bloc, Brussels has bigger fish to fry than Tsipras.
“We think the government will manage to carry out the reforms, despite its small parliamentary majority, because it wants to begin talks on debt relief,” Natixis economist Jesus Castillo said.
Creditors “will not want to go back to an arm-wrestling match” with Greece given the deteriorating state of the global economy and continued conflict in the Middle East, he added.
Standard and Poor’s on Friday raised its credit rating for Greek debt by one notch, saying it expects Athens to meet the conditions attached to the latest bailout package.
Greece’s sovereign rating went up to “B-” from “CCC+,” which removes it from the list of nation’s vulnerable to default.
Nevertheless, Greece’s youngest leader in more than a century “lost a lot of time to adapt and see reality,” argues political analyst George Sefertzis, adding that the 41-year-old prime minister “is still in search of a new equilibrium.”
Tsipras is now locked in a delicate negotiation with an uncertain outcome — exactly what happened to his conservative predecessor, former Greek prime minister Antonis Samaras, in his final six months in power in 2014, Sefertzis said.
“We are losing time without obtaining a result, and without having a clear idea of where the negotiations will lead,” he said.
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