Greek result buys Europe time

Paul Mason
Former economics editor, Newsnight

image copyrightAFP

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.