Greek result buys Europe time

Election night in Greece

At Syriza HQ, after about two hours poring over election results scribbled on notepaper, amid discarded cans of Amstel, they broke out a fresh packet of Marlboros and breathed. "We have lost. It's great for us," one woman beamed at me.

The party's MPs arrived, their suits and slick hair incongruous amid the Che T-shirts and the stubble. The press were crammed into rooms where the party's filing system sits: box files, with the names of obscure conferences stencilled onto them in felt-tip.

Greece had come within three percentage points of being ruled by a party whose HQ is smaller than a primary school. Syriza - an alliance of communists, feminists and ecologists - had avoided having to run the army of a Nato country and the economy of a collapsing state.

New Democracy's three-point victory, under the Greek system, gives them 50 MPs on top of their proportional allocation, and with the support of the rump of the former ruling party Pasok, and that of Syriza's rival eurocommunist group, Democratic Left, should give them a working majority in parliament.

The victory was delivered not only by ND's party machine, but by the hundreds of thousands of liberal and socialist voters who gritted their teeth and voted for the conservatives to stop Syriza. I heard stories of "progressive" middle-class people - with antagonisms toward ND going back generations - flying back from remote islands just to vote for Samaras.

Syriza's leader Alexis Tsipras not only conceded early, but assured the press he would not try and form a coalition of his own: that is, he would not be waiting to tempt Pasok and the Democratic Left into a Syriza-led coalition if the main talks fail. Likewise, he would not be joining a government of national unity.

Thus, last night's result leaves an open goal for the European Union to resolve the Greek crisis.

Mr Samaras can form a coalition committed to obeying the EU/IMF and the latter can - if they wish - soften their demands for austerity to the point where the Greek economic death-spiral is stopped. Spain can now go bust on its own timetable, instead of one dictated by a Greek exit from the euro.

And then the problems begin. The over-arching problem is the severe social pain and disintegration austerity has brought to Greece: 22% unemployment; 1,000-euro one-off tax demands to pensioners; falling incomes, closing shops and bars; quiet motorways. Despair.

'Urban myth'

Before election day I met the boss of a clothing store who is also big in the retail association. I expected him to rail at me - but about business. Instead he railed at me about fascism: "They marched down our streets like an army. Black helmets, no banners, big sticks. It looked so much like the riot police that I said to my friend "what - are the police now fighting the police?" But it was Golden Dawn."

He went on to allege that the Greek fascist party had major links with organised crime, and that its networks extended not only into the riot police but to police involved in facilitating the drugs and human trafficking trade. This, like much of what worries Greeks, is unprovable - but his fears were logical.

For Syriza is a phenomenon produced by crisis. It had about 15,000 members before the May election and has just scored 27%. In the rural village where I met young farmers voting Syriza last week, there was no tangible presence for the party.

"Of course we're worried that Tsipras will take us out of the euro," they said, "but we have to vote for him. The old parties have failed. We need change."

If Syriza turns out to be a bubble that deflates, and the crisis is not solved, it is entirely possible that the "despair vote" - both in the cities and the countryside - will switch to Golden Dawn. The party's activists have already created an urban myth around themselves: they lead old ladies safely to the ATM so that the muggers cannot get them. They evict "troublesome" migrant tenants, repaint the flat for free and hand the keys to the owner.

"They only had to do this a few times," says one of my contacts in the anti-capitalist movement, "for it to become an urban myth. Many of the anarchists now accept that Golden Dawn has 'appropriated the myth of violence': the image that they are the guys who can take on the authorities and win. Before, it was the [anarchist] black bloc in their balaclavas who had that kudos. Now it's them."

Some political activists now speak of a "low-level civil war" between fascists, migrants, anarchists and the riot police in the poor areas of the big cities. Even if this is hyperbole, it reflects the reality that the Greek state - which could not bring itself to find the Golden Dawn MP it had issued an arrest warrant for, following his televised assault on two female MPs - may struggle to handle the unrest that is building.

'Vortex of failure'

Antonis Samaras' task is huge. His own party is an uneasy coalition of technocrats and traditional clientists, and there is no money to fund the old politics of patronage. His programme rests on getting the EU to double the amount of time given before Greece has to meet its deficit targets - and getting the IMF to allow ND to cut taxes instead of raising them.

Then, through a combination of rapid privatisation and the removal of employment rights, Samaras has to restructure the economy in a direction that is directly opposite, and probably just as radical, to the way half the population just voted.

Pasok, the former socialist ruling party, eviscerated again last night, has to ride shotgun for this all the way.

There is a chance it will work, if the EU rapidly cuts Greece some slack, adding in structural funds to launch a mini-Marshall Plan for Greece. This is not certain, since it's now clear there are strong voices in Berlin that would see Greece forced to exit - if not now then at some point soon along the road.

In addition, the EU banking system is struggling to avoid being dragged into a vortex of failure. Last night for Europe was about avoiding a detonation, not defusing the bomb itself.

Soon the media will move on from Greece but the country's plight should remain of deep concern to the rest of the world. Two years of medicine prescribed by the Troika not only threatened to kill the patient but the doctor as well.

If the new coalition fails - either because it is not strong enough or the EU's help is not strong enough - it's very clear what the alternatives are. The combined vote of the Marxist left last night was 37%. The fascists maintained their 7% vote - missing fourth place by just 40,000 votes.

It is entirely within the grasp of the European centre to make that the high point of the left and right. But it depends on decisively resolving the paralysis in Berlin and Brussels.

Paul Mason Article written by Paul Mason Paul Mason Former economics editor, Newsnight

End of an era

After 12 years on Newsnight, Economics editor Paul Mason has moved on to pastures new and this blog is now closed.

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  • rate this

    Comment number 61.

    'The Greek Result Buys Time'

    Yes, but time for what ?

    Time to regroup to take on the next wave of alligators ?
    (swamp draining was never their strong point, too afraid of being the only one without shorts)

    Time to say 'come on and get it over with then' ?

    Time to shoot the breeze in Mexico and wonder just who it is who pays taxes if none of the delegates do.

    Time, falls sleepless like a hawk

  • rate this

    Comment number 60.

    @16 ActionR
    The privatizations are not only unused plots of land or islands- as many foreigners may imagine - but it includes a long list of public enterprises too. Surprisingly, you will be able to find not only companies that have been historically profitable (=can help the deficit) but also companies that are considered "cash cows" for the state. Why so much pressure to sell these off?

  • rate this

    Comment number 59.

    georgeflood @58
    "how to help?"

    How to trust:

    That 'work pays fairly' - equal pay, even for 'menial'

    That 'commitment pays' - full employment, even 'in transit'

    That 'investment pays' - research + stable aggregate demand

    How to hope:

    That taxes paid - all PAYE / VAT

    No cheating - penalties for 'sore thumb' idle-rich, lazy, criminal

    Equal Democracy: 'human nature' not enemy but friend

  • rate this

    Comment number 58.

    How can you help a borrower with a proven record of irresponsible financial management.
    they need to develope their own austerity plan. and
    responsible goverment. EU, bad loans, write off & move on.
    this plan will work for all members.

  • rate this

    Comment number 57.

    #56 to fore the rich and other in greece to pay there tax thats what it is time for.

    wonder what countries benifit from greeks paying tax in thier country rather than in greece over the last 20 years or so.

  • rate this

    Comment number 56.

    Time for what?
    - implement an FTT (Financial Transaction Tax) which will also act as audit trail to snag nefarious, potentially illegal transactions;
    - implement its own credit rating agency(s) that may not be as biased as those coming out of the US
    - work on fiscal union towards a United States of Europe.

  • rate this

    Comment number 55.

    why not do a report ref Greece - obstacles for 1 group of entrepreneurs to open online store - 10 mnths collecting papers from offices, fire dept & banks. At health dept, they were told that all shareholders of company would have to provide chest X-rays, & the most surreal demand of all, stool samples.full story here

  • rate this

    Comment number 54.

    51. frenchliving

    Until all of this mess I was blissfully ignorant of what was going on, although I've always had an intense near hatred of the inequality in our society. I particularly despise people who fall at the feet of non-entities like the chinless wonders the English call their 'royal family' and their 'hangers-on'.
    A fairer society demands the end of this scam run by the banks.
    +ve money.

  • rate this

    Comment number 53.

    I had no idea that the unelected President of the EU gets paid more than the elected Presidents and Prime Ministers of soverign states.

    They moan about Greece but they haven't published their own accounts for 17 years. Perhaps Brussells and all these technocrats should be independently audited?

    How can you expect people in Europe to have confidence in a system like that!?

  • rate this

    Comment number 52.

    Today a perfect example repeated everywhere and everyday in Southern Europe. The government have been cut out. Land opposite is cleared for a new house to be built. The people will be paid in wood from another plot of land a few kms away. WHY? Governments are only looking after their own interests. No tax will be collected on 8 days of work. British people just don't get it. They need to get it.

  • rate this

    Comment number 51.

    All wind from the PolitBeuro but the FOREX markets will have them. Euroland is bankrupt south of Paris. What ever country I travel to it is the same story. 3 days ago a bailout just for Spanish banks but now post Greek election, how convenient a general bailout of the Spanish government is on the cards.

    45. SaintMungo what do you expect from the masters of shady economies?

  • rate this

    Comment number 50.

    St M @45
    Who sees?

    In Euro-beginning, to be charitable, political & commercial naivety assumed self-interest would muddle through, for some more happily than others, the wheels to stay on

    Workable Equal Democracy not even considered, the fiction grew of 'equipping for equal competitiveness (return on capital)', the excuse for selling 'infrastructure' & 'loans' in far advance of economy


  • rate this

    Comment number 49.

    Why does the BBC keep giving air time to BEuroCrats from the PolitBeuro?

    It is really too much that the BBC is not defending democracy but seems to be subservient to unelected public servants with no democratic mandate.

    Van Rompuoy is styled as some president. He is unelected and receives a salary greater than the president of the United States - WHY - WHO EVER ASKED ME, WHO EVER ASKED YOU?

  • rate this

    Comment number 48.

    Dobbindog @40
    "to haunt us"

    True of whatever we say or do, but what exactly your point?

    We all mix 'fact' & 'other facts' & surmise, selection & principle from & toward 'perspective', hoping to be & be thought 'balanced'

    Has Paul 'gone too far', or 'not far enough'?

    For 'our' good, or for our masters?

    Rejecting 'honest-fact' centrism'?
    Seeing liberty & security not in fact opposed?
    Or -ve?

  • rate this

    Comment number 47.

    The Ponzi banking scam has caused this problem, and if allowed to continue, will continue to worsen the situation. This vote was for a vote of 'no change', so the situation will indeed worsen. Seems obvious.
    There is a way to end the scam and that is for governments to issue their currency, and for banks to be prevented from creating money as debt.
    Debt is -ve money, issue +ve money, simple.

  • rate this

    Comment number 46.

    "so give them money - lets stop pretending they can pay it back"

    Let's provide them with a breathing-space in which they might have a better chance to sort themselves out. It worked in postwar Europe - it was called The Marshall Plan and its self-interested motive was to avert a communist takeover of a war-devastated W.Europe. THAT plan was cheap at the price.

  • rate this

    Comment number 45.

    15. weltysparrow
    "Then, through a combination of rapid privatisation"
    You are absolutely correct, only a lunatic would sell his cows to buy milk.
    The Italians I see have also started to 'privatise' their wealth producing assets, which is blatant theft since the money the banks will use to purchase has not been issued by a sovereign but rather was created as debt.
    What a scam!

  • rate this

    Comment number 44.

    11. ken_mcc

    I hesitate to call you a complete thicko, because you like almost all of us have no idea that the problem is simply that these governments did not issue their currency. The mainstream media will not tell you how money is created and by whom or for whose benefit.
    Banks have created -ve money (debt) which we all pay interest on (UK Gov paid £48 BILLION). Simply to use our own currency.

  • rate this

    Comment number 43.


    The issue as the Greeks saw it was whether they were in the Euro or not. So-called austerity did not measure in the voting to the same extent. They wanted stability. This is only to be expected. Now they look to Europe for the better deal which will end the collapse. Europe should reciprocate.

    If Europe fails to rise to the challenge then we go down the snake again.

  • rate this

    Comment number 42.

    Make no mistake, the banks have done this, and were only allowed to do so by because people do not realise the folly of allowing private banks to issue the currency, as debt.
    The same is happening here for the same reasons.
    The solution is simple, governments only to issue currency, the money is only debt, so ISSUE THE CURRENCY TO PAY IT OFF AND THE DEBT IS GONE.
    (banks hold debt)-(issued)=0


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