The Left is Back in Greece

Shockwaves have rippled throughout Europe as the anti-austerity party, Syriza romped to victory in the elections held in Greece on Sunday. Alexis Tsipras, the leader of Syriza has promised to renegotiate the bailout terms with Greece’s international backers known as the Troika (a coalition of Eurozone countries, the International Monetary Fund and the European Central Bank). His aim is to end the devastating austerity that has caused the Greek economy to experience near perpetual recession for the past six years. When asked what Syriza’s victory meant, Tsipras responded “the vicious cycle of austerity is over.”

Following the financial catastrophe of 2008, Greece’s debt became a massive problem for government finances. Greece needed to borrow money to keep the country running, but was unable to borrow from the banks due to the extortionate interest rates it was being charged. To save the Greek economy from collapse the Troika offered the Greek government a bailout. In exchange the Greek government would have to slash spending by huge amounts to balance its books. However this was the wrong time for austerity, private spending was already low due to the crash, so government spending was required to keep the economy afloat. Unfortunately the terms of the bailout resulted in plummeting private and public spending, creating a vicious cycle of decline. As many Greeks lost their jobs or had their pay cut, government tax revenues went down and welfare payments went up. However since the government was required to try and balance its budget, this created a bigger imbalance and forced further cuts. This meant less money in the economy, so more people were made unemployed, which in turn made government finances even worse off.

No wonder people voted for the most viable anti-austerity party; Syriza.

In the election Syriza managed to win 36.4% of the vote and 149 seats (just two short of a majority) compared to 27.8% and 76 seats for New Democracy, the senior party in the ruling coalition. This victory for Syriza is a line in the sand for both Greece and Europe. It has shown what will happen when you unleash harsh austerity on your people. Greece is far from unique, in Spain the anti-austerity and left-wing party Podemos was leading in the polls at the end of last year, despite only being founded in January! It also serves as a warning to establishment left-wing parties across Europe, including Labour hear in Britain. The rise in popularity of Syriza has been possible thanks to the collapse of the establishment left-wing party, Pasok. It entered into a collation with the conservative New Democracy and helped to unleash the austerity Greece has had to undergo. Other establishment left-wing parties should be wary before carrying out similar programs back home.

It is a new day in Europe, what happens next with Greece will decide the fate of the European integration project that is the European Union.  

Syriza supporters celebrate following victory in the election
Souce: BBC