Greece’s election to end all elections – for now

Greece’s election to end all elections – for now

A hastily arranged three-week election campaign in a country now apathetic towards its political class for the unbearable burden of reforms and austerity. This Greek election is being seen as nothing more than a mirage for the country’s creditors who are running the show. What the country needs now is a period of political stability.

A late swing towards Syriza in the polls is being reported today, after barely any space between the leftist party and its conservative rival, New Democracy. What’s more, they can do nothing more to convince the Greek people, as campaigning drew to an end with roaring rallies in squares in the Greek capital, Athens.

A new mandate for Syriza would mean a measure of credibility after signing off the country’s finances to international creditors this summer, staving off a Grexit apocalypse, which seems to be far from the horizon. They are at the behest of the Eurozone machine and Germany, who expect any new government to fully comply with pressing reforms. Warnings from the European Commission were just as unyielding.

It is probable that coalition talks will have to begin as the mist clears on Monday morning and results become clear – neither party is expected to win a majority. Expect no coalition between Syriza and New Democracy – their economic policies differ greatly, and Syriza points the finger at ND for being partly responsible for the country’s economic problems, being part of the ‘old guard’. New Democracy believe Tsipras and his fractured party don’t have the will to implement reforms and that only they can be trusted to grow Greece’s economy. For its part, output is expected to contract by two per-cent despite unexpected growth of 0.8% in the second quarter of the year.

The new leader in government will be the seventh prime minister since the Greek debt crisis begin in 2009, in an electoral process which has occurred five times over in six years. It is no wonder that Greeks are experiencing a severe bout of election fatigue.

Syriza is still a relatively new party, elected untested just eight months ago. It would be unfair for them to assume the blame for years and years of economic mismanagement beforehand. Tsipras put it quite humorously – it’s like someone who drank three bottles of whisky and a shot of vodka then claiming it was the vodka that had given him a hangover. It depends how well you handle your drink for this metaphor to work, of course.

One of Syriza’s key pledges is a cleaning-up exercise – a definitive end to self-serving politicians who corrupted the system, leading to the financial crisis that the same politicians claimed they were managing. It is a populist, leftist message which is not unique in Europe.

Tsipras appeared at the rally alongside Podemos leader Pablo Iglesias, pointing again to the huge European significance of Greece’s national vote. Elections in Portugal and Spain – Southern European states that were forced to seek financial assistance from Europe – have the economy at the heart of their campaign.

Spain's anti-austerity, anti-corruption party leader Pablo Iglesias at Syriza rally event in Athens
Spain’s anti-austerity, anti-corruption party leader Pablo Iglesias at Syriza rally event in Athens

Tsipras said: “The message of our victory will be sent to Pablo in Spain, Gerry Adams in Ireland and to a progressive prime minister in Portugal.”

Portugal exited its bailout last year with its economy steadying and growing after three years of recession. The vote there on 4th October mirrors Greece as far as the likelihood of a coalition is concerned. Neither the centre-right ruling coalition nor the centre-left opposition Socialists can claim a full majority.

In Spain, leaders can boast one of the largest eurozone growth figures for this year, as polls there are yet to hand a majority to either the ruling conservatives or opposition Socialists.

It is a sort of political paralysis as anti-establishment parties continue to fracture traditional bipartite systems.

The European left will likely use a Syriza victory to show the pernicious effect of austerity on the social fabric of a country, which will be lumbered with yet more cuts. Those out of work reached 25.2% in July in what many call a “lost generation”.

Unemployment in Portugal is roughly in line with the European average at 11%, while in Spain, it is stubbornly at 22%. In both countries, it remains the young who are the most precarious.

Any coalition government will oversee the management of Greece’s bailout, ensuring a smooth path ahead for the country’s financial system after capital controls – still in place – were imposed earlier this year when the banking system went virtually bust.

Surprisingly, market traders have scarcely been kept awake at night by the Greek vote after Tsipras’ climb-down this summer. It is accepted that any incoming leader will have no choice but to swallow the bailout pill.

Before word of elections, talk in the summer of debt restructuring or debt reduction was rife in Europe. Germany said it was out of the question, while other economists argued it was the only way to stop Greece being straddled with debts for decades to come. Will there be any movement on this when negotiations begin in earnest?

For the country’s new leader, the interminable flow of migrants to Greece’s coastline may prove to be one of the most pressing problems. Greece borders several Balkan countries which are but the latest route for thousands of people on the move.

Sunday’s election is yet another chapter in the ongoing problems for Europe, solutions for which are elusive and painful.

For more: BBC News – Key Greece election on a knife edge

Cameron’s ticking clock to an EU referendum

Cameron’s ticking clock to an EU referendum

When pressed yesterday, David Cameron said that having his planned EU referendum before the end of 2017 would be all the better. He refused to be drawn on what stance he would pick as of today, and denied the chance for cabinet members to take their own personal stance on pro- or anti-Europe in the event of a vote. In his first interview of 2015, Cameron reinforced that his changes would not only make Britain better, but in a not so modest vein, would make Europe better too.

With such a traditional election campaign already in motion, fought between the Conservatives and Labour on the economy and the NHS, how much space will Europe end up occupying? Nigel Farage is sitting quiet so far – he will have to produce a manifesto with much more than just Europe on the table – but how long before he throws his hat into the ring and pressurises Cameron and the election rhetoric into broaching the topic of the EU? If last year gave the first signs of a UKIP building itself up for the election, when several Conservative MPs and many more voters not only flirted with UKIP but deserted the Tories, Cameron’s UKIP nightmare is set to worsen.

Current benefits

Was David Cameron’s logic right when he argued so strongly that by controlling benefits fewer EU migrants would come to this country? Many political commentators dismissed this as overly simplistic, and in any case, is Cameron even right to limit his view of “problematic” migrants as being just from the EU? He may be forgetting a sizeable number of EU migrants who are simply here to work, regardless of benefits. A UCL study from November revealed that European migrants pay out far more in taxes than they receive back in benefits. That is to the tune of £4.96 billion each year since 2011, making it a net contribution of £20 billion so far. Cameron would surely not argue with how well he says the UK has recovered. In this way, the highly skilled and educated migrants that the study says are coming to Britain are no more than taking advantage of the country’s upbeat economic figures and the growing number of jobs on offer.

In the interview with the BBC’s Andrew Marr, Cameron renewed Conservative efforts to bring down Britain’s debt and deficit, in order to, as he says, prevent massive cuts to health such as in Portugal or Greece, where cuts of 16 or 17 per cent have been made, again according to Cameron’s figures. Britain can only ever be strong if Europe is too, and Cameron went on to say that influence, trade links and access to European markets from being in the union are invaluable for the country’s recovery.

He later outlined his current thinking on benefits for EU migrants: no unemployment benefit full stop, migrants would be kicked out if they can’t find a job within six months, and tax credits would only come after residing in the UK for four years and paying enough into the system. Cameron was asked several times over on where he stands on a cap on EU migrants – it sounded like he had let that idea go, but he didn’t say it. How Cameron phrased it was: “Those things [change in welfare system for EU migrants] I believe would achieve a reduction in, in migration…” It is a not-so-convincing line of argument.

“The most important thing of all is being able to make changes to the welfare system,” he told the Mail on Sunday. “The key areas are safeguarding the single market, getting out of ever-closer union, being able to veto regulations and a package of measures on welfare.”

(Re-)negotiation

David Cameron has put a two-year window on the table in which he wishes to re-negotiate Britain’s relationship with the European Union, an ever closer relationship which Cameron says he wants to get out of. This would require treaty change, and therefore a vote, which would have to be agreed unanimously between the union’s 28 member states. Angela Merkel a year ago ruled out retouching any of the treaties.

When David Cameron sits down with Angela Merkel later on in the week, the topic of Europe will be needless to say highest on the list. The Euro at a nine-year low against the dollar, the possibility of a Greek exit, so say some, if or indeed when, Syriza are elected into the Greek government at the end of January, the likelihood of quantitative easing starting within the 19-member currency, and last but not least, Putin’s tactics this year in Ukraine. All in all, it is a perilous mood that David Cameron has to contend with as Europe – and the UK’s biggest trading partner – enters into 2015.

What to watch out for then when Angela Merkel arrives in London on Wednesday … Will she be set back by the anti-EU feeling that there is in the UK, at the same time when she is having to confront right-wing forces, albeit less than comparable to UKIP, that nonetheless threaten relations between different ethnic groups? Newspapers are calling it a “love-hate relationship”, whilst another says “Angela Merkel underestimates how toxic Europe is for David Cameron’s UK voters”. This might just be the final time David Cameron and Angela Merkel can share their grievances together as heads of government, and neither is known for mincing their words on the topic of Europe at least. Yet for all of the worrying, David Cameron can rest easy in knowing he’s not the leader who will be micro-managing Europe’s precarious year ahead.