16 Dec 2014

Economic recovery in Greece, but will it mean ‘Mad Max’ in government?

“Expect Mad Max if Syriza wins” runs the headline over a comment piece in the newspaper Democratia. It’s by the prime minister’s closest adviser. Meanwhile, police have released video of what they claim is an “airborne battalion of anarchists”, who leapt across rooftops using Parkour to evade capture while hurling petrol bombs in a recent riot.

Welcome to Greece on the eve of a critical fortnight, during which its parliament has to elect a president and its people have to do Christmas.

Tsipras, leader of Greece's far-left Syriza party, leaves the Presidential palace in Athens

Syriza leader Alexis Tsipras leaves the Presidential palace in Athens

I found Athens feverish on arrival. On the streets, there are signs of the slight economic revival that the GDP figures tell us about. After losing a quarter of its GDP because of austerity, and throwing more than 60 per cent of its young people out of work, Greece has grown 1.7 per cent in the past year.

People have stopped hoarding money and started spending it, though the collapse in wages means that prices for the basics you need as an unemployed graduate are also low. It’s a kebab and long, slow coffee economy still for them.

But the main story now is not the economy. If parliament fails to elect a president between now and 29 December, there will be a general election called. With Syriza, the far-Left party, ahead four per cent in the polls, it is likely that it will form the biggest party.

Syriza is no vague left of centre party, it is rooted in the country’s communist tradition, drawing together the “Eurocommunists” who split from the hardline Stalinists in the 1970s, plus numerous Trotskyist, Maoist and New Left activists – and thousands of young people for whom all these labels are fairly retro, but who’ve flocked to the party as the only thing that looked progressive and modern and opposed austerity.

Syriza will end austerity and will demand that the European central bank (ECB) cancels half of Greek debt and buys all future debt at zero interest for 60 years. There is a chance – but a slim one – that if Syriza had a strong mandate, and if it played EU negotiations cleverly, it could achieve something close to this. But there is a bigger chance that a Left-led Greece would clash with Brussels, that money would flow out of the country and that – in the process – Greece would get forced out of the Eurozone.

Yesterday, the boss of the Greek central bank Yiannis Stournaras said: “the crisis in recent days is now taking serious dimensions, that liquidity in the market is decreasing at a fast pace … and the risk of irreparable damage for the Greek economy is now great.”

French President Francois Hollande Visits Greece

Yiannis Stournaras, right

Normally, central bankers try to calm things down in situations like this. But Stournaras is the former finance minister for the current government – and the comments sparked accusations of political interference. The Bank of Greece then had to clarify that Mr Stournaras was not saying there was a run on banks, but just a decline in “general levels of liquidity” due to the rising interest rate on government debt.

The Greek stock exchange, which slumped last week, stabilised yesterday. But, with comments like these flying around, it may not stabilise for long. Once we get to Wednesday night, with the first vote in parliament, everybody will have a clear idea of how close the government is to falling.

If it’s bad for the government there is, I think, a chance of some capital flight, because everybody here remembers Cyprus, and how the central bank nailed savers with more than €100k in the first of the new-style “bail-ins” (where savers lose money because the state can’t afford to recapitalise the banks).


Among the young, leftist clientele of the cafés in Exarchia, the famous bohemian district of Athens, they are thinking several moves ahead. A lot of people in private are discussing how the Greek state will react if Syriza wins.

The party already runs the country’s largest administrative region and is reportedly facing a tough time with civil servants there. The theory is that, once it has to run the riot police, a NATO army and whatever remnants of the Cold War secret state still exist, there could be ructions.

There were riots here last month during the commemoration of Britain’s military occupation of Athens, and the battle between the British army and the communist resistance in 1944. And riots when an anarchist bank robber on hunger strike neared death. That’s when the “flying anarchist” meme started, to which the earth-bound anarchists responded with accusations that the cops themselves had formed an agent-provocateur Black Bloc to stir things up.

Given that background, it is not unusual to hear people in the late-night bars speculating on exactly what form of “coup” – military, police, judicial or ECB – might happen when it all goes pear-shaped. As this country had a military junta within living memory, such speculation is not completely crazy.


In this situation, what you would want is a clear idea of the programme of a potential Syriza government, and its demonstrable ability to govern.

But Syriza’s leaders speak to the world in speeches and press releases – and mostly in Greek. An attempt to calm investors in the City of London ended, as I reported, in farce. Even now, there is no official nominee for the post of Treasury minister, should Syriza come to power. And, in the back channels, where mainstream parties usually have strong links to journalists, bankers and civil servants, Syriza does not.

I’ve always said with the Eurocrisis: Greece was the detonator, Spain and Italy the explosive mass. The tactic of separating the detonator off, with a bailout, was designed so that, if it went off, it would do so on its own.

Today, the Eurocrisis has become the stagnation of the core. France and Italy are the countries we need to be worried about in the long term, with their lack of growth, their high unemployment, the political fragility of the centre there. But they’re not going into meltdown if Greece does.

What happens next? A vote in parliament on Wednesday night, a vote right after Christmas and a final attempt on 29 December.

What’s at stake is clear. If Syriza wins a subsequent election, it will end the austerity imposed by the EU and International monetary fund and call Germany’s bluff. It will be a fragile, inexperienced Marxist government in an EU and Nato member state. But, if it succeeds, the EU will be in a whole new ball game.

8 reader comments

  1. Alan says:

    The article doesn’t specify whose economic recovery. Such terms usually refer to the complicit, needless to say the average Greek is probably excluded.

  2. Η Tsopanos says:

    Economic recovery for whom Mr Mason>?
    The unemployed?The pensioners?The low income earners?
    You live in a different world Mr Mason,we have nothing to lose if Syriza wins,Eu dictatorship and the Greek juntas has a lot to lose.
    Open your eyes.

  3. Stefanos says:

    There is no growth in the Greek economy, EU decided to use a new methodology for calculating economic results, and the it showed a “virtual” increase in GDP using the same growth data.

  4. Stefanos says:

    Mr Stournaras is a man of the Greek Government. His Prime Minister, Mr. Samaras, has done such a mess of the economy that he is about to resolve to the last refuge of the incompetent: Violence.
    Just before this turn, he seeks votes by terrorizing citizens foretolding an economic catastrophy if SYRIZA comes to power. Difficult to defend that in a recently impoverished country with over 27% unemployment for ALL his term…

  5. Philip Edwards says:

    Funny that. In the Alex Thomson blog he comments about bull**** terms such as “enhanced interrogation techniques” for torture.

    Then you appear yet again with standard bull**** like “austerity” for capitalist banking theft.and the even worse “……everybody here remembers Cyprus, and how the central bank nailed savers with more than €100k in the first of the new-style “bail-ins” (where savers lose money because the state can’t afford to recapitalise the banks).”

    So savers “lose” money and don’t have it stolen by the bankers who robbed national wealth in the first place.

    Funny too how you didn’t remember what happened in Cyprus when you first blogged on this issue.

    Then again, what should we expect from a bought-and-paid-for necon bull*******?

    I hope Syriza wins and takes on the scum who own and run the Eurozone, then shows them up for the rotten-to-the-core corrupt kleptocracy they are. That goes for their mouthpieces too…….which, in case you miss the point, includes you.

  6. Craig Wherlock says:

    I agree with you analysis that things are liable to get rough in Greece in the event of new round of national elections create the prospect of a SYRIZA government. The current political establishment with its allies among the oligarchs and EU will do everything in their power to make sure that any such government will not be allowed to succeed.

    BTW the demos on the 6th December were to mark the death of Alexandros Grigoropoulos on this day in 2008. Tensions were further heightened by the hunger strike by Nikos Romanos over demands to attend university classes whilst in jail. Nothing to do with British involvement in 1944.

  7. James says:

    Very interesting article and different from the usual takes on Greece, the Euro and the European Union. Also, spot on over the fears of a coup if Syriza wins the (imminent) elections. Is this bullying Greece or attempting to prevent such a terrible event.

  8. VN Gelis says:

    The govt may approve another man for President, they may reduce the amount of MP’s that are allowed to vote for President (GD inside) etc or they may bribe the remaining MPs to vote for the current President. Though any of the above dont appear as yet to be being seriously played, a Syriza win in any elections seems likely. The issue is whether they receive enough votes to form a govt on their own and not with others (then their excuses will be reduced in what they can and cant do).

    Either which way this is a two way problem. If Greeks cant pay their fake debts to EU banksters and default the banksters will have the problem. If the banksters want more flesh then the Greeks dont have any to give. Syriza will not stand six months in power if it doesn’t alleviate the situation. The parliamentary path will have then reached its limits.

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