For radical Greek politicians, the only way is Essex

By Tom Rowley, Special Correspondent 27 January 2015

Meet the green tea-sipping Essex University don who schooled Greece's hard-left new finance minister

Mr Bailey holds a copy of the Thesis titled Optimisation and Strikes submitted to Essex University by Yanis Varoufakis Photo: Rii Schroer/The Telegraph

He is an unlikely radical. Roy Bailey’s grey shirt matches his hair and he drinks green tea in an office piled high with books on endogenous growth theory.

So the 67-year-old was “bemused” to learn that Yanis Varoufakis, one of his economics students for the best part of a decade, has been appointed Greece’s finance minister in the country’s new hard-Left government.

Mr Varoufakis, who has called the European Union’s austerity programme “fiscal waterboarding”, will now front demands to have the Greeks’ €240 billion (£180 billion) debt written off.

His unequivocal stance is bound to set Syriza, his party of socialists and Marxists, at odds with the rest of Europe.

Mr Bailey, an honorary senior lecturer in economics at Essex University, where he has taught since 1972, gave a teenage Varoufakis some of his first tutorials in economics. But his pupil went on to graduate with only a lower second.

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Mr Bailey went on to advise the student again for his PhD thesis, which credits the academic’s “useful” contribution.

Mr Varoufakis is not the only Essex alumnus playing a leading role in Syriza. The university, whose motto is “challenging convention”, has emerged as a nursery for Greece’s radical politicians.

It also schooled Rena Dourou, the governor of greater Athens, who was the party’s most senior politician until this week’s election, and Fotini Vaki, a Syriza MP for Corfu.

Sir Christopher Pissarides, a Cypriot economist who has criticised the EU’s position on debt relief, is also a graduate.

Mr Varoufakis graduated from Essex in 1981, gaining a 2.2 in mathematical economics. He stayed on to study for his PhD, awarded in 1987.

Mr Bailey, who was awarded an MBE last year for his 42-year university career, remembers Mr Varoufakis as a “very sound student”.

^{Greece's newly appointed finance minister Yanis Varoufakis (AFP)}

“I wouldn’t say he was always scoring top marks,” he said. “You wouldn’t say this is a stellar individual we should send to Harvard. But he shone when it came to independent thinking.”

Even then, Mr Varoufakis stood out and was “always prepared to argue,” added Mr Bailey. “If he wanted to make a point, he’d make it. He was always forthright. He was a serious person.” He is proud of the former student’s new role. “It is pleasing,” he said. “It may be quite the opposite in a few months’ time depending how things go – I might be ashamed of him.”

Mr Bailey, who described his own political outlook as centrist, denied that he had influenced Mr Varoufakis’s outlook. “We’re just here to throw them a few ideas and let them get on with it,” he said. “You could say that the faculty was – and still is – radical, but in the sense of provoking ideas.”

He said that Mr Varoufakis was “pretty level-headed” and would not struggle to negotiate with Angela Merkel, the German chancellor. “Whether he will win out, I don’t know,” he said.

Prof Todd Landman, the executive dean for social sciences, said the university had welcomed 4,000 Greeks in the past 50 years and it was merely a “coincidence” that so many went on to become Syriza politicians.

But he admitted that Ms Dourou, who completed a Masters degree in ideology and discourse analysis in 2001, was schooled in “post-Marxist” techniques.

“She was from the Left already and she would have responded well to the course. It was all about criticising modern society for its contradictions. She has re-imagined a Leftist vision for Greece and what she studied here probably helped her.”

For radical Greek politicians, the only way is Essex - Telegraph

Greece insists it can longer tolerate 'choking austerity'

By Nick Squires, Athens 28 January 2015

Greece's new prime minister says the country can no longer tolerate "choking austerity" and that its huge debts need to be renegotiated

Greek Prime Minister Alexis Tsipras chairs the first cabinet meeting of the government in the Parliament Photo: EPA

Greece's radical leftist prime minister said on Wednesday that he wanted to avoid "a mutually destructive clash" with Europe but insisted that he would demand a renegotiation of the country's massive debt.

Alexis Tsipras's remarks caused deep unease on the markets, with the Greek stock market falling more than 8.5 per cent and yields on Greek government bonds rising to near record levels, a sign of investor concern that Athens could default and be forced out of the euro zone.

At his first cabinet meeting since winning the general election on Sunday, the 40-year-old former Communist said he would negotiate over the 240 billion euros (£180 billion) that Athens owes its creditors in order to secure a "viable, fair, mutually beneficial solution".

"We won't get into a mutually destructive clash, but we will not continue a policy of subjection," he said.

"This is a government of societal salvation and it has a very difficult task. We want to negotiate the reduction of the debt and an end to conditions of choking austerity."

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He said the burden of paying off the loans was "crushing and unobtainable".

His newly-appointed, British-educated finance minister, Yanis Varoufakis, who will spearhead the negotiations with international lenders, said the bail-out given to Greece had been a "toxic mistake".

"Today we are turning the page on that mistake that cost human lives, that were lost or undermined," said Mr Varoufakis, an academic who taught at Essex University before taking up posts in Australia and the US.

EU leaders have indicated that they are not prepared to write-off any part of the debt, but that they might be open to giving Greece more time in which to pay it back and to reduce interest rates.

Officials in Brussels said they expected the Greeks "to fulfil everything that they have promised to fulfil."

That sets the stage for a drawn-out confrontation with the new Greek government, a coalition between Syriza and the right-wing Independent Greeks, a minor party which is also vehemently opposed to paying off all the debt.

Mr Tsipras was elected on a promise to the Greek people to have the debt drastically reduced and to roll back the deeply-resented austerity policies that were introduced at the insistence of the EU, European Central Bank and International Monetary Fund five years ago.

But as he embarks on negotiations, he will need to tone down the fiery rhetoric that helped get him elected.

"His party has been very radical in the past but it is going to have to be less confrontational now and that will be a big challenge," Dr George Kyris, an expert on Greek politics from Birmingham University, told The Telegraph.

"There is room for manoeuvre but it depends on whether they will be able to adjust to how things are done in Europe. At the same time, Brussels has to face the fact that this is a democratically-elected government." In a blow to international investor confidence, the government announced that it would halt the privatisation of Greece's biggest port, at Piraeus, south of Athens.

The previous, conservative government had agreed to sell a 67 per cent stake in the port authority, with China's COSCO group one of the companies putting in a bid.

One of the main planks of Syriza's election campaign was a pledge to block the sale of such state assets.

Greece insists it can longer tolerate 'choking austerity' - Telegraph

Markets tumble as Greek government begins to backtrack on austerity

By Szu Ping Chan, and James Titcomb 28 January 2015

Greek borrowing costs jump and markets tumble as Alexis Tsipras, Greece's new prime minister, vows never to blindly submit to European creditors and government blocks sale of state assets

Greek markets were thrown into deeper chaos on Wednesday as investors feared that the new, anti-bailout government would enact radical reforms that could jeopardise the country’s future in the Eurozone.

The Athens Stock Exchange tumbled more than 9pc, led by a 27pc fall in bank stocks, amid concerns that the Syriza-led coalition could take direct control of the country’s lenders and write off billions of euros in household loans.

Prime minister Alexis Tsipras vowed never to bow to European creditors as the government took steps to wind back austerity by blocking plans to privatise state assets.

Mr Tsipras, who held his first cabinet meeting after being elected over the weekend, said he wanted a “viable, mutually beneficial solution” that would represent a fair deal with its creditors. “Our people are suffering and demand respect... we must bleed to defend their dignity,” he told MPs.

While Mr Tsipras said the Syriza-led coalition would not engage in brinkmanship with European creditors, he added: “We will not continue a policy of subjection either.”

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Mr Tsipras’s comments helped to push up Greek benchmark borrowing costs back above the psychologically important 10pc mark, while European markets also fell. Spanish stocks finished the day down 1.3pc, while France’s benchmark index fell 0.3pc. The FTSE 100 in London closed up 0.2pc, buoyed by a rise in mining stocks.

The Greek government owns a majority stake in three of the country’s four biggest lenders, and traders said there was a risk that the coalition could parachute its own management teams into the banks and take control of the day-to-day running of lenders.

Traders said this would destabilise the banking system and throw the country into fresh chaos if the government conducted a mass write-off.

“Initially there was some hope that the new government would have been a fresh start, but there has been a gradual realisation that this government is not as moderate as some people in the market believed,” said one senior Greek banker. “There are now concerns that the government could be more aggressive in terms of restructuring loans and providing borrower relief. Before the election, there was talk of a potential management change at the banks - it had been discussed before the election by a number of Syriza MPs."

^{Greek PM Alexis Tsipras gestures next to Deputy PM Giannis Dragasakis as the new government poses for a group picture after the first meeting of the new cabinet in the parliament building in Athens (Photo: Reuters).}

Greek banks have lost almost 45pc of their value in the three days since Syriza ascended to power in Sunday’s election as the dual threats of a bank run and the loss of support from the European Central Bank threaten a liquidity squeeze.

The FTSE/Athex Bank Index, a weighted index of Greek bank shares, fell to a new all-time low yesterday. National Bank of Greece, Piraeus, Alpha Bank and Eurobank all slumped further, with €8.2bn wiped off their combined market values since the election.

It came as ministers that they would block the sale of the government’s controlling stake in the Public Power Corporation of Greece (PPC), which runs almost all of the country’s retail electricity market and accounts for about two thirds of the nation’s power output. The move is part of a pledge by ministers to reinstate sacked government workers and restore cuts to pensions.

“We will halt immediately any privatisation of PPC,” said Panagiotis Lafazanis, Greece’s new energy minister. “There will be a new PPC which will help considerably the restoration of the country’s productive activities.”

The government halted the privatisation of Greece’s main port, Piraeus, on Tuesday. Chinese shipping giant Cosco had planned to turn the port into its new European hub.

Reports emerged that €11bn had been taken out of Greek banks in January, with more withdrawals likely amid fears that the life support from the European Central Bank will be switched off.

Suggestions that Greece may turn to Russia for external financing also caused market jitters. Greece raised a formal objection to an EU statement released on Tuesday condemning Russia's alleged involvement in the Ukraine crisis and calling for broader sanctions.

Separately on Wednesday, France's finance minister ruled out further financial relief for Greece, as he insisted that the country's debt burden would not be shouldered by the rest of the Eurozone.

Michel Sapin said that while European creditors would look at reducing the interest rate Greece pays on its debt and the timeframe used for its repayment, cancelling more of the country's loans was out of the question.

“What’s the debt that Greece has? It’s a debt to the ECB, it’s to the European Union, to the countries who have shared the burden. There is no question of transferring (the burden) from Greek taxpayers toward the taxpayers of France, Germany, Slovenia or Spain [...] We are not going to make contributions of that nature," he told RTL radio.

“At the same time obviously there are things to be discussed with the Greek government, to allow them to have a more sustainable debt that’s easier to repay. These are discussions that are normal to have with a country in this situation. “There’s the question of interest rates, there’s the question of the duration of the repayment, there’s the question of growth."

Mr Sapin's comments came after his predecessor, Pierre Moscovici, who currently serves as a European Commissioner, said the EU would seek "less intrusive, more flexible forms of cooperation" with Athens.

^{The Greek government holds its first cabinet meeting on Wednesday (Source: AP)}

"What we all want is that Greece recovers, creating growth and jobs, that it reduces inequality, that it can deal with the problem of its debt and remains in the euro area," he said in an interview.

However, others have taken a harder stance. "The message ‘we want your support but not your conditions’ won’t fly,” said Dutch Finance Minister Jeroen Dijsselbloem. “My message will be that we’re open to cooperation but that the support from Europe also means the Greeks have to make an effort.”

The Institute of German Economic Research (IW), one of the country's leading institutes, suggested that a Greek exit would be preferable to relaxing the country's bail-out agreement.

"If Greece is going to take a tough line, then Europe will take a tough line as well," it said.

Greece's current bail-out programme expires at the end of February, and experts say it is unlikely that any renegotiation would be concluded by then. A further extension would enable the ECB to maintain liquidity support to Greece.

Analysts said reducing interest charges on loans would "significantly help Greek debt sustainability", although it would not provide a long-term solution.

Michel Martinez, an economist at Societe Generale, said:

By way of example, forgiving interest payments on loans from euro area lenders and extending the average loan maturity to 50 years would reduce the effective interest rate from 3pc to 1.5pc over 2014-2022, pushing the Greek public debt ratio down to 125pc of GDP by 2022, close to the IMF target. Yet, the outstanding debt would remain large and probably cap Greece's access to the market. The debt sustainability equation would definitely not be fixed.

However, Mr Martinez said that the losses incurred by countries might not be acceptable:

Lowering the interest rate means incurring losses. In the current programme, 30 year bilateral loans are linked to the three-month Euribor with a 50bp spread. This is a low interest rate compared to the funding conditions of most countries. The actual average lending rate from European Financial Stability Facility (EFSF) is linked to the borrowing cost of the EFSF/European Stability Mechanism (ESM). Easing further debt service costs would imply a willingness on the part of euro area member states to reduce loan charges to below their borrowing costs. Some parliaments may well decide not to participate in such a transfer of resources.

However, he described a Greek exit from the euro as a "lose-lose scenario", and highlighted that a dirty Greek exit from the Eurozone could trigger huge losses for other European states, with a full default costing France and Germany around €120bn (£90bn).

Translations by Bloomberg/Reuters

Markets tumble as Greek government begins to backtrack on austerity - Telegraph

Greek PM Alexis Tsipras unveils cabinet of mavericks and visionaries

Helena Smith in Athens and Ian Traynor in Brussels Wednesday 28 January 2015

New finance minister says debt negotiations will not continue with hated troika of technocrats representing foreign lenders

Newly appointed ministers and deputy ministers attend a swearing-in ceremony at the presidential palace in Athens. Photograph: Panagiotis Tzamaros/Reuters

Greece’s prime minister, Alexis Tsipras, has lined up a formidable coterie of academics, human rights advocates, mavericks and visionaries to participate in Europe’s first anti-austerity government.

Displaying few signs of backing down from pledges to dismantle punitive belt-tightening measures at the heart of the debt-choked country’s international rescue programme, the left-wing radical put together a 40-strong cabinet clearly aimed at challenging Athens’s creditors.

In a taste of what lies ahead, Yanis Varoufakis, the flamboyant new finance minister, said on his way to the government’s swearing-in ceremony that negotiations would not continue with the hated troika of officials representing foreign lenders.

“They have already begun but not with the troika,” said Varoufakis, an economist who has disseminated his anti-orthodox views through blogs and tweets almost daily since the debt crisis exploded in Athens in late 2009 – something he promised on Tuesday to continue to do. “The time to put up or shut up has, I have been told, arrived,” he wrote on his blog. “My plan is to defy such advice.”

Tsipras’s Syriza party, which emerged as the winner of snap polls on Sunday, has been adamant that it will deal only with governments, and not the technocrats that represent the EU, ECB and IMF. Varoufakis is to represent Greece at Eurozone meetings.

Setting its stamp on the new era, the cabinet took the oath of office in two separate ceremonies, with some sworn in during a religious service but most breaking with tradition to conduct their investiture before the president, Karolos Papoulias.

Tsipras, an avowed atheist, was sworn in by Papoulias on Monday. At 40 he is Athens’s youngest post-war prime minister.

After falling two seats short of attaining a 151-seat majority in Greece’s 300-seat parliament, Syriza was forced into a coalition with the populist right-wing Independent Greeks party.

The junior partner is openly Eurosceptic and withering of the way international creditors have turned Greece into an “occupied zone, a debt colony”. Its leader, Panos Kammenos, who has declared that Europe is governed by “German neo-Nazis”, assumes the helm of the defence ministry.

Tsipras acted on pledges to pare back government with the establishment of 10 ministries and four super-ministries amalgamating different portfolios, starkly illuminating the failure of previous Greek governments to act on promises to reform ministry structures.

Giorgos Stathakis, a political economics professor, took over the development portfolio, a super-ministry that includes oversight of tourism, transport and shipping, the country’s biggest industries.

Panaghiotis Kouroublis, who is blind, was made health minister, becoming the first Greek politician with a disability to hold public office.

Euclid Tsakalotos, a British-trained economist who rose out of the anti-globalisation movement, became deputy minister in charge of international economic relations.

Panaghiotis Lafazanis, a Marxist who heads Syriza’s far-left faction, was put in charge of the super-ministry incorporating energy, industry and environmental affairs. He has openly opposed any concessions being made with Greece’s creditors when stalled negotiations over completing the country’s current bailout programme resume.

Syriza says its priorities will be to cancel austerity and renegotiate the country’s “unsustainable” €320bn (£238bn)debt load. With time now of the essence – Athens’s rescue funds expire at the end of February – reaction ranged from trepidation to applause. Greek markets endured a second day of turmoil on Tuesday, with bank shares diving and investors fearing that the anti-bailout government might be set on a collision course with creditors.

The government’s plan to negotiate a new debt deal has already run into resistance from its Eurozone peers, which fear that allowing Athens to write off some of its obligations would encourage other troubled countries such as Spain and Ireland to seek similar relief.

Germany’s finance minister, Wolfgang Schäuble, on Tuesday dismissed assertions that Greece’s plight was due to the savage austerity measures imposed by Europe over the past five years in return for €240bn in bailout funds.

“The people of Greece are suffering more than people elsewhere in Europe,” he said. “Not because of demands from Brussels or the ECB, but because of the failure of Greek political elites over decades.” The pressure on the Tsipras government to honour the terms of the bailout deals struck by the previous two Greek governments – terms the new prime minister in Athens has threatened to repudiate – was quite correct, Schäuble declared.

“The demands on Greece are in line with the ECB’s mandate. They are fully legitimate.” He said European solidarity with countries in economic and financial distress was no substitute for those countries having to decide how to act themselves. “Solidarity cannot replace necessary decisions by member states.”

Deploying a tactic he commonly uses when opposing a policy switch, Schäuble warned that any shift would require a renegotiation of EU treaties. “I witness a growing call from a number of member states to stick to the legal framework that is in place now,” he said. “Changing the rule book would require a huge struggle to get the people on board in Germany, but also in other member states.”

Observers welcomed the Syriza-led government’s administrative reforms and its decision to appoint a minister whose writ will be to crack down on widespread tax evasion and corruption in the upper echelons of society. “It sends clear messages of the new government’s appetite to deal with corruption and … problems of the Greek state,” said George Kyris, a lecturer at Birmingham University.

But many also fear that the government is headed for confrontation with the bodies that have kept the insolvent Greek economy afloat. “It includes neo-Stalinists and anti-orthodox economists with little idea how to deal with Europe,” said Prof Dimitirs Keridis, a political scientist at Panteion University, Athens. “I am afraid that it presages confrontation, but perhaps that is what Tsipras wants.”

The radicals have dismissed criticism that they will not be up to the task of governance. Speaking to the Guardian recently, Tsakalotos said there would never be a good time for the leftists to assume power in a political world that had moved increasingly to the right.

“We would always face market pressure and opposition,” said the Oxford-educated academic, who will be responsible for attracting badly needed foreign investment. “Any difficulty that we might face should make us work harder, plan more thoroughly, become more decisive.”

Assets stripped

To the victor the spoils? Not in Athens, where the new prime minister arrived at his official residence on Monday night to discover that computers, paperwork and even the toiletries had been removed by the outgoing administration.

Shortly after he was sworn in, Syriza leader Alexis Tsipras found himself inside the Maximos Mansion without some basic necessities. “They took everything,” he said. “I was looking for an hour to find soap.”

Traditionally, a defeated Greek prime minister will wait until their successor has been anointed to wish them well. But Antonis Samaras was in such a rush to go that he even failed to leave the Wi-Fi password.

“We sit in the dark. We have no internet, no email, no way to communicate with each other,” one staffer told Germany’s Der Spiegel.It took until Tuesday evening for Tsipras to get his hands on the official prime ministerial Twitter account. In his first tweet, he repeated the oath he took 24 hours earlier, pledging to uphold the constitution and always serve the interests of the Greek people.

But on Tuesday night, the new administration was struggling to put its mark on the system; 48 hours after the polls closed, an official Greek government website still showed Samaras as prime minister.

Graeme Wearden

Greek PM Alexis Tsipras unveils cabinet of mavericks and visionaries | World news | The Guardian

Germany will relent on Greek debt – and Europe will suffer

Josef Joffe Tuesday 27 January 2015

Alexis Tsipras has inflicted another defeat on Berlin. Merkel is no longer Empress Angela, and the real problems await in France and Italy

Alexis Tsipras bows to officials and journalists after his swearing-in as prime minister at the Presidential Palace in Athens. Photograph: Yannis Kolesidis/EPA

So Alex the Greek won, and the euro lost. Not quite. In fact, the bulk of euro land – the “Club Med” countries plus the mainstream left – are quietly triumphant. The southern tier and Europe’s social democratic parties never liked the diktat of the Germans, who have been cracking the whip of fiscal discipline and market-oriented reforms since the great crash of 2008. For years they have all preached cheap money and unfettered deficit spending.

Now Berlin’s critics feel vindicated and emboldened by the victory of Greece’s far-out left (Syriza), which will form a government with the equally radical right (Independent Greeks). Athens, so they calculate, will finally break Angela Merkel’s stranglehold, her fingers already pried loose by Mario Draghi when the European Central Bank opened the flood gates of quantitative easing, which will gush forth masses of money at the lowest rates in history.

Gianni Pittella, the leader of the social democratic caucus in the European parliament, is cheering. Renegotiating the Greek debt – read: forgiving part of it – should no longer be a “taboo”. The EU commission has signalled its readiness to negotiate. Germany’s Greens are pushing for a “haircut”.

The long faces belong to the usual suspects: Merkel’s Christian Democrats and her hard line point man on the ECB board, Jens Weidmann. Let’s tally up the score. Berlin has lost two rounds now, last week against Draghi, this week against Alexis Tsipras. Whatever happened to “Empress Angela”, for years feted as the heir of Charlemagne and Europe’s most powerful leader?

The problem of Germany and a dwindling “Club North” is not so much Greeks clamouring for gifts, but the rest, especially the big two of France and Italy, with Spain a half-reformist number three. Paris and Rome are loth to do what the economic logic of monetary union demands. If you can no longer devalue on the outside to stay competitive, you have to “devalue” on the inside by lowering wages, spending and market barriers at home. They’ve proven unable to outmanoeuvre their nations’ powerful privileged interest groups.

Now hope springs anew. If the German chancellor yields to Athens, how can she refuse to ease up on Paris and Rome? Also, why reform and court electoral disaster when Draghi, the ECB chief, has already engineered a massive devaluation of the euro that promises a welcome, though illusionary, surge in competitiveness on the global market?

Tsipras’s Greece is a problem postponed, not solved. As always when disaster strikes, politicos seek solace by celebrating the silver lining. Don’t worry, so the line goes, Tsipras was just posturing when he threatened default and promised to rehire government workers, raise wages and pensions, and open the spigot of public spending. Now that he is elected, the rosy view has it, the firebrand will act the statesman. In exchange for relief from the Troika – of the IMF, EU and ECB – he’ll just throw a few sops to his constituencies and then angle back to the path of fiscal and reformist virtue.

The soothing lore continues. Did not Bill Clinton and Germany’s Gerhard Schröder demonstrate with their welfare and labour market reforms that pain is best inflicted by the left? The analogy does not wash. Tsipras has decided to get into bed with the right-wing Independent Greeks, a party that shares none of Syriza’s ideological convictions, save two: contempt for fiscal probity, and resentment of Europe.

With the far-right breathing down his neck, how will Tspiras change his colours, especially since the coalition represents not only the anti-reformist consensus of the country, but also a slew of deeply entrenched special interests such as public unions and sheltered industries? Let him move against Greece’s vast state sector, its patronage networks and its anti-competitive regulations, and he’ll court a coalition break-up from day one. So on the road to Brussels, don’t count on Saul turning into Paul, let alone on the government’s longevity.

The bottom line is this: Greece will not bolt from the euro, and the other 18 won’t force a “Grexit” – not even Merkel, though she is being depicted as Hitler, with Germany as an “occupying power” that, according to Tsipras, should pay vast restitution for the cruel real thing back in the 1940s. So the Greek debt will be rescheduled and a chunk of it forgiven, together with a fourth rescue package for Athens.

The upside: Europe can afford to keep bailing out a tiny economy like Greece’s. It is peanuts, or rather olives. The more serious downside is the bad example. France, Italy et al can now invoke this new Greek revolt and warn Berlin: “You see what you reaped with your Teutonic insistence on austerity and market reforms? You lost the reasonable Conservatives under Antonis Samaras and brought to power those wild-eyed populists of the far right and left. Relent, or you will get their anti-European soul mates in France and Italy – Marine Le Pen and Beppo Grillo.”

The bet is that Merkel will relent – and that Europe will not thrive on a diet of cheap money, deficit spending and devaluation, not in the absence of painful pro-competitive reforms. The long-term data tells a sombre story. Since the heady 1970s, EU average growth has fallen by three-quarters of a point, decade after decade. Greece is just the headlines; the real drama is Europe’s slow, almost imperceptible decline. Up on Mount Olympus, the Gods may be weeping.

Germany will relent on Greek debt – and Europe will suffer | Josef Joffe | Comment is free | The Guardian

Greece’s new anti-austerity government set on collision course with Brussels

Helena Smith in Athens, Julian Borger in Brussels and Katie Allen in London Tuesday 27 January 2015

Syriza leader Alexis Tsipras heads coalition of left and right parties with mandate to take on country’s paymasters

Alexis Tsipras, Greece’s new prime minister, says he will not wear a necktie until his country’s bailout terms are renegotiated. Photograph: Yannis Behrakis/Reuters

Greek radicals sought on Monday to redraw the political map of Europe, forming a coalition government of left and right, united only by their desire to defy the European financial establishment and shrug off the constraints of austerity.

The coalition, led by 40-year-old Alexis Tsipras, was expected to dispatch its new finance minister to Brussels in the next few days to seek a fundamental renegotiation of Greece’s economic bailout package, vowing that “the end of humiliation has come”. Tsipras and his Syriza party have promised to replace the austerity programmes imposed by Greece’s international creditors with policies aimed at helping the third of the population now living in poverty.

Finance ministers from the Eurozone, meeting at EU headquarters, responded cautiously, acknowledging the new political realities in Greece and offering to negotiate, while ruling out the straight debt write-off Tsipras is demanding.

A spokesman for the German government, which would have to approve and largely finance any new debt relief, said its position was unchanged by the Greek election.

The future of the Eurozone will be at stake in the tough negotiations to come.

The radical backlash to austerity embodied by Syriza’s electoral triumph immediately showed signs of spreading on Monday. Spain is due to hold elections later this year, and the country’s counterpart to Syriza, Podemos, is surging in opinion polls. Its leader, Pablo Iglesias, told an ebullient rally in Valencia: “Hope is coming, fear is fleeing. Syriza, Podemos, we will win.”

The inauguration of Tsipras, the youngest prime minister in Greek history, was laden with the symbolism of change. He broke with tradition by taking a civil oath of office rather than a religious vow before the nation’s spiritual leader, Archbishop Ieronymos. Tsipras appeared in an open-necked shirt, having vowed not to wear a tie until he has negotiated Greece a new deal in Europe.

His first act as prime minister was to lay roses at a memorial to 200 Greek communists executed by the Nazis in May 1944. Analysts said the gesture left little room for interpretation: for a nation so humiliated after five years of wrenching austerity-driven recession, it was aimed, squarely, at signalling that it was now ready to stand up to Europe’s paymaster, Germany.

Syriza’s margin of victory went far beyond expectations, winning 36% of the vote but falling just two seats short of an overall majority in parliament. After a brief round of consultations, Tsipras turned the political order upside down by partnering with the right-wing party Independent Greeks (known by its Greek acronym ANEL), notable for its xenophobia, anti-Semitism and homophobia, which won just under 5% of the vote.

ANEL's leader, Panos Kammenos, singled out Jews for not paying taxes. He has also loudly drawn a historical parallel between austerity and wartime occupation that Tsipras left unspoken with Monday’s visit to the war memorial. Kammenos has described Europe as being governed by “German neo-Nazis”.

Podemos party secretary general Pablo Iglesias, who suggested Syriza victory could be repeated in Spain. Photograph: Andrea Comas/Reuters

Tsipras’s choice of coalition partners came as an unpleasant surprise to the Eurozone's finance ministers gathering under wet, leaden skies in Brussels. One after the other, they insisted the new Greek coalition would face the same rules and conditions as its predecessors.

The German government, in particular, emphasised continuity. The finance minister, Wolfgang Schäuble, said the new government would have to abide by the bailout agreements Greece had signed.

But the finance ministers also made clear there was room for negotiation. Pierre Moscovici, the European commissioner for economics and finance, said the EU recognised “the clarity and legitimacy of the new Greek government” and claimed: “We all want a Greece that stays on its feet, creating jobs and growth, reducing inequality, and a Greece that repays its debt.”

Jeroen Dijsselbloem, the Dutch president of the euro group, said there was no political support for a write-off of Greek debt but added that “if necessary” the euro group could have another look at the sustainability of Greece’s debt, after the completion of a review of the country’s current financial situation.

Dijsselbloem said he had had a 15-minute phone conversation with the new Greek finance minister, who he did not name but who had been widely expected to be a Syriza economist, Yanis Varoufakis.

Dijsselbloem said he had expressed willingness to work together with the coalition, adding that the new Greek minister had been “very adamant” his country would stay in the Eurozone. Although no details were discussed in the initial conversation, the Dutch euro group leader said it had been a good start.

“What I will not do is negotiate through the press and I hope they will not either,” Dijsselbloem said. “The problems in the Greek economy have not been solved overnight with this election. They are still there.”

The document swearing in Greece’s new prime minister Alexis Tsipras Photograph: Aris Messinis/AFP/Getty Images

Speaking in Athens, Varoufakis sought to downplay concerns triggered by the party’s choice of coalition partners that the new government would take an overly aggressive stance in negotiations.

Varoufakis said the government would seek to persuade its Eurozone partners to allow the country to reduce its debt burden by linking repayments to growth. He also dismissed suggestions that Syriza would threaten a “Grexit”, a Greek departure from the Eurozone. “We, who happen to be in the Eurozone, must be very careful not to toy with loose and fast talk about Grexit or fragmentation,” he told BBC radio.

“Grexit is not on the cards; we are not going to Brussels and to Frankfurt and to Berlin in confrontational style. There is plenty of room for mutual gains and benefits.”

Market reaction to the election result was muted. Syriza’s decisive victory initially caused the euro, already under pressure from the European Central Bank’s latest stimulus package, fall to an 11-year low against the dollar. But it recovered during later trading and, by the time Tsipras was sworn, in the euro was up on the day against the dollar at about $1.124.

“The Greek election results were no surprise and were largely priced into markets,” said Jasper Lawler, market analyst at the broker CMC Markets UK.

“The true impact of the victory of Syriza will be hard to ascertain until there is more news on the renegotiation of the bailout terms between Greece and the troika.”

Mujtaba Rahman, an analyst at Eurasia Group political risk consultants, said that with his partnership with ANEL rather than the moderate party Potami (the River), Tsipras was “signalling he is prioritising internal over external constraints. He has formed a coalition he can sell to the hard left in Syriza even if it makes it tougher to negotiate a new deal on Greek debt.”

Poster reads ‘That’s a really good night Frau Merkel’, in a sign of how many feel about ‘paymaster’ Germany. Photograph: Michael Debets/Pacific Press/BI

Rahman argued the room for manoeuvre for the German chancellor, Angela Merkel, had narrowed as a result of last week’s quantitative easing decision by Mario Draghi, the head of the European Central Bank, pumping more than €1tn into financial markets.

That decision was taken despite opposition from Merkel and German institutions, who saw it as a financial bailout to free-spending Eurozone governments. “Quantitative easing is a big problem for Merkel, as it has mobilised constituencies which opposed it in a vocal way,” Rahman said. As a result, the room for negotiation has narrowed from both sides.

“The probability of Greek exit from the Eurozone has to increase,” he concluded, but he still believes it is more likely that an 11th-hour compromise can be found in the remaining months before Greece has to be repay a nearly €7bn loan to the European Central Bank in June. That is the really hard deadline that the negotiators are facing.

 

Greece’s new anti-austerity government set on collision course with Brussels | World news | The Guardian

Syriza’s Tsipras sworn in after Greek government formed with right-wingers

Helena Smith in Athens Tuesday 27 January 2015

New PM takes oath after radical leftists agree to share power with populist right-wing party Independent Greeks
• Greece election aftermath – live updates
• Greek election: submit questions for our experts

Panos Kammenos (left) and Alexis Tsipras, whose parties will form the new government in Greece. Photograph: AFP/Getty Images

A new chapter in Greece’s uphill struggle to remain solvent – and in the Eurozone – has begun in earnest as anti-austerity politicians assumed the helm of government following the radical left Syriza party’s spectacular electoral victory on Sunday night.

Ushering in the new era, Alexis Tsipras was not sworn in, as tradition dictates, in the presence of Archbishop Iernonymos but instead took the oath of office in a civil ceremony. At 40, he becomes the country’s youngest premier in modern times.

The leftist, who surprised Greeks by speedily agreeing to share power with the populist right-wing Independent Greeks party, ANEL, was on Monday afternoon handed a mandate by president Karolos Papoulias to form a government following his investiture at the presidential palace. Afterwards, the new prime minister pronounced that he will give his all “to protect the interests of the Greek people”.

Earlier, Panos Kammenos, ANEL's rumbustious leader, emerged from hour-long talks with Tsipras saying the two politicians had successfully formed a coalition.

“I want to say, simply, that from this moment, there is a government,” Kammenos told reporters gathered outside Syriza’s headquarters.

“The Independent Greeks party will give a vote of confidence to the prime minister, Alexis Tsipras. The prime minister will go to the president and … the cabinet makeup will be announced by the prime minister. The aim for all Greeks is to embark on a new day, with full sovereignty.”

With 36.3 % of the vote, Syriza fell two seats short of the 151 MPs it needed to govern alone. The Independent Greeks, who have huge ideological differences with the leftists but are bonded by the desire to end biting EU-IMF-mandated cutbacks, won 4.75% of the vote and 13 seats. The conservative New Democracy party – the dominant force in a coalition lead by the outgoing prime minister Antonis Samaras – suffered ignominious defeat, collapsing to 76 seats in the 300-seat parliament.

Syriza’s victory could encourage other radical anti-austerity parties in southern Europe, including Spain’s Podemos, whose leader, Pablo Iglesias, told a rally in Valencia: “Hope is coming, fear is fleeing. Syriza, Podemos, we will win.”

After five years of austerity-fuelled recession that has driven the vast majority of Greeks into poverty and despair, Syriza cadres described the new administration as a “national salvation government”.

The veteran leftist Dimitris Vitsas, who sits on Syriza’s political secretariat, said now that the “people have spoken” the government would move quickly to tackle the devastating effects of austerity. “Our immediate and most pressing priority is to alleviate the humanitarian crisis,” he said in an interview on SKAI TV. “The Greek people have spoken, they have cancelled the policies of the memorandum,” he said referring to the deeply unpopular bailout accords debt-crippled Athens has signed with creditors.

With more than 26% of the population out of work, and more than a third at risk of poverty, the new government was assuming the reins not only of a broke state but a broken society.

“And yet despite all this talks of economic catastrophe, [with the advent to power of a left-wing government] “we have woken up to a sunny day,” Vitsas said. “The banks haven’t closed, they are operating normally, schools are open. Everything is just as it should be.”

But Tsipras faces a formidable task, and within hours of his victory, foreign and European officials pressed home the point that there would be little wiggle room – and not much of a grace period – for the new government.

The leftists say full economic recovery can only come if Athens’ bailout agreements are rewritten and the country’s monumental debt pile – totalling €318bn (£238bn) – is reduced.

Yanis Varoufakis, the internationally renowned economist, newly installed as a Syriza MP and tipped to become the finance minister, likened the Greek economy to a “poisoned chalice”.

“Fiscal waterboarding has turned us into a debt colony,” he told the BBC.

Before Sunday’s election, Varoufakis, who gave up his post at Texas University in Austin to run with Syriza, had described the prospect of resuming stalled talks with foreign lenders as daunting.

“It is an extremely scary project and prospect,” he said. If, as looks likely, the academic assumes the finance ministry portfolio, he will almost certainly head the negotiations.

Yet Greece’s partners show no signs of letting up. “There are internal Eurozone rules to be respected,” IMF chief Christine Lagarde told Le Monde. “We cannot make special categories for such or such country.”

Arriving in Brussels for a scheduled meeting of euro group finance ministers, Pierre Moscovici, the European commissioner for economics and finance, told reporters that the EU expected Greece to pay back its debt. “We all want a Greece that stays on its feet, creating jobs and growth, reducing inequality, and a Greece that repays its debt.”

Germany has pledged to work with Greece’s new government, but has not given any hint that it might support a debt deal. In a press conference on Monday, government spokesman Steffen Seibert said: “The Greek voters have chosen Syriza and we have to respect that … Currently, we have a result and no government. But when we do we will offer to work together with them.”

However, Seibert made clear that any talks would not be taking place between Germany and Greece, but between Greece and its European partners.

Analysts in Athens warned that with the new government poised to ratchet up tensions with creditors, Greece was headed for a prolonged – and possibly fatal – period of political uncertainty. The country, which faces debt repayments of €4.3bn in the coming months, has been guaranteed bailout funds only until the end of February.

The unexpectedly good showing of the neo-Nazi Golden Dawn party – with 6.28% of the vote the extremists emerged as the country’s third biggest political force – added to the fears. “Greece is for sure entering a new era and my great worry is that it could be very destructive,” said the prominent commentator Alexis Papahelas. “There are people in this country who know what war and occupation means but the young don’t seem to know,” he said. “My fear is that they may turn to an even more anti-systemic party, on the far right [in the event of failure]. I really don’t rule it out.”

 

Syriza’s Tsipras sworn in after Greek government formed with right-wingers | World news | The Guardian

Greece election: Syriza leader Alexis Tsipras sworn in as prime minister, forms coalition government with Independent Greeks

 

Photo: Alexis Tsipras at a ceremony at the Kessariani shooting range site, where hundreds of members of the Greek Resistance were executed by Nazi forces during World War II, on January 26 (Reuters/Alkis Konstantinidis)

Related Story: Outgoing Greek PM concedes election defeat

Map: Greece

Greece's new left-wing leader Alexis Tsipras has been sworn in as prime minister after agreeing to create a coalition with a right-wing party to form a new hard-line, anti-bailout government and end nearly five years of austerity measures.

At the age of 40, he becomes the youngest Greek prime minister in 150 years.

 

Raw Greek emotion

Couples stood with their arms around each other. A father hugged his son to him. Young men bunched together with the red Syriza flags wrapped around their shoulders. They were all crammed in the square outside the University of Athens, listening intently to Alexis Tsipras, the man who has connected with their years of frustration, and fashioned a stunning political win for the radical left. What was notable on this day was not just the joy felt by long-ignored left-wing advocates, dancing around strewn political leaflets in central Athens until the early morning. What struck me was how many times people who said they didn't normally vote left-wing wanted a return to "humanity". Austerity had stripped them of this, they said. Echoing Alexis Tsipras, they say this win is giving them hope that dignity will return to Greece. Brussels will soon learn how strongly a nation that feels humiliated can kick back. By Europe Correspondent Mary Gearin

Mr Tsipras, characteristically without a tie, also broke with tradition by taking a civil instead of a religious oath, pledging to "always serve the interests of the Greek people".

The new leader started talks with his potential coalition partners the day after the election, with his Syriza party just two seats short of what was needed to be able to rule in its own right.

Independent Greeks party leader Panos Kammenos emerged from a meeting with Mr Tsipras announcing the two parties had agreed to form a coalition government.

"From this moment on there is a government, we will give a vote of confidence to the new prime minister," Mr Kammenos said.

While their positions on many social issues are at odds, both parties are vehemently opposed to the austerity program imposed on Greece by its European creditors.

After his victory, Mr Tsipras repeated his campaign pledge to renegotiate the terms of Greece's 240-billion-euro bailout with the European Union and the International Monetary Fund, which many Greeks blame for exacerbating the economic hardship the country has endured since the financial crisis.

Those creditors are watching and waiting as they consider how to negotiate with Greece's new leaders.

Euro-zone leaders urge Greece to uphold prior agreements

Closely watching the election, Europe's bureaucrats have been adamant that Greece needs to keep to its bailout deal.

Euro group chief Jeroen Dijsselbloem warned Greece that its euro membership depended on Athens sticking to prior agreements, after the radical left Syriza party won elections with a vow to renegotiate its debts.

"Membership of the Eurozone means that you comply with everything you have agreed with," Mr Dijsselbloem said as he arrived for talks of Eurozone finance ministers in Brussels.

"On that basis, we're ready to work with them."

The Greek election win for anti-austerity party Syriza could help Italy's push for greater flexibility in the European Union's approach to budget and broader economic issues according to Italy's foreign minister Paolo Gentiloni.

 

Alexis Tsipras (r) shakes hands with Greek president Karolos Papoulias during his swearing-in ceremony

"There has been a tug of war for months between austerity and flexibility," he said.

"There is no doubt the Greek result, if politically managed by Greece and the European Union with realistic and flexible negotiations, favours the call for an end to the inflexibility we Italians have been making."

Meanwhile, German chancellor Angela Merkel said she expects the new Greek government to uphold its commitments to international creditors, her spokesman said.

"In our view it is important for the new government to take action to foster Greece's continued economic recovery," the spokesman, Steffen Seibert, told reporters.

"That also means Greece sticking to its previous commitments."

British prime minister David Cameron wants Greece's new government to keep tackling the country's budget deficit and to meet its international commitments, his spokeswoman said.

"The prime minister respects the decision of the Greek people but obviously there are questions for the Eurozone and for Greece about how they deliver on their commitments," his spokeswoman said.

"Spending more on public finances is not proven to be driving growth in Greece or indeed in other European countries so it needs to continue to deal with its deficit and it needs to meet its international commitments."

Spain's conservative prime minister Mariano Rajoy also weighed in, congratulating Mr Tsipras and hoping for a "stable" government.

"I hope the election result leads to the forming of a stable government committed to the program of European integration that Greece and Spain share," Mr Rajoy wrote.

Reuters/AFP

From other news sites:

• BBC about 9 hours ago Mon 26 Jan 2015, 11:52pm Syriza and Independent Greeks agree Greece coalition
• The Sydney Morning Herald about 9 hours ago Tue 27 Jan 2015, 12:35am Greece election: Left-wing Syriza forms a coalition with right-wing Independent Greeks
• News.com.au yesterday at 11:14am Mon 26 Jan 2015, 11:14am Left wing Syriza party wins historic victory in Greek election
• Daily Telegraph about 9 hours ago Tue 27 Jan 2015, 12:28am Greek election: who are Independent Greeks?
• Yahoo!7 News yesterday at 11:49am Mon 26 Jan 2015, 11:49am Possible allies for Greek election victors Syriza

Greece election: Syriza leader Alexis Tsipras sworn in as prime minister, forms coalition government with Independent Greeks - ABC News (Australian Broadcasting Corporation)

Greece shows what can happen when the young revolt against corrupt elites

Paul Mason Monday 26 January 2015

The rise of Syria can’t just be explained by the crisis in the Eurozone: a youthful generation of professionals has had enough of tax-evading oligarchs

Syria supporters cheer Alexis Tsipras on 22 January. 2015. Tsipras's attack on corruption resonated massively among the young. Photograph: Louisa Gouliamaki/AFP/Getty

At Syriza’s HQ, the cigarette smoke in the cafe swirls into shapes. If those could reflect the images in the minds of the men hunched over their black coffees, they would probably be the faces of Che Guevara, or Aris Velouchiotis, the second world war Greek resistance fighter. These are veteran leftists who expected to end their days as professors of such esoteric subjects as development economics, human rights law and who killed who in the civil war. Instead, they are on the brink of power.

Black coffee and hard pretzels are all the cafe provides, together with the possibility of contracting lung cancer. But on the eve of the vote, I found its occupants confident, if bemused.

However, Syria HQ is not the place to learn about radicalisation. The fact that a party with a “central committee” even got close to power has nothing to do with a sudden swing to Marxism in the Greek psyche. It is, instead, testimony to three things: the strategic crisis of the Eurozone, the determination of the Greek elite to cling to systemic corruption, and a new way of thinking among the young.

Of these, the Eurozone's crisis is easiest to understand – because its consequences can be read so easily in the macroeconomic figures. The IMF predicted Greece would grow as the result of its aid package in 2010. Instead, the economy has shrunk by 25%. Wages are down by the same amount. Youth unemployment stands at 60% – and that is among those who are still in the country.

So the economic collapse – about which all Greeks, both right and left-wing, are bitter – is not just seen as a material collapse. It demonstrated complete myopia among the European policy elite. In all of drama and comedy there is no figure more laughable as a rich man who does not know what he is doing. For the past four years the troika – the European Commission, IMF and European Central Bank – has provided Greeks with just such a spectacle.

As for the Greek oligarchs, their misrule long predates the crisis. These are not only the famous shipping magnates, whose industry pays no tax, but the bosses of energy and construction groups and football clubs. As one eminent Greek economist told me last week: “These guys have avoided paying tax through the Metaxas dictatorship, the Nazi occupation, a civil war and a military junta.” They had no intention of paying taxes as the troika began demanding Greece balance the books after 2010, which is why the burden fell on those Greeks trapped in the PAYE system – a workforce of 3.5 million that fell during the crisis to just 2.5 million.

The oligarchs allowed the Greek state to become a battleground of conflicting interests. As Yiannis Palaiologos, a Greek journalist, put it in his recent book on the crisis, there is “a pervasive irresponsibility, a sense that no one is in charge, no one is willing or able to act as a custodian of the common good”.

But their most corrosive impact is on the layers of society beneath them. “There goes X,” Greeks say to each other as the rich walk to their tables in trendy bars. “He is controlling Y in parliament and having an affair with Z.” It’s like a soap opera, but for real, and too many Greeks are deferentially mesmerised by it.

Over three general elections Syriza’s achievement has been to politicise the issue of the oligarchy. The Greek word for them is “the entangled” – and they were, above all, entangled in the centrist political duopoly. Because Syria owes them nothing, its leader, Alexis Tsipras, was able to give the issue of corruption and tax evasion both rhetorical barrels – and this resonated massively among the young.

Alexis Tsipras of Syriza in Athens on 22 January. Photograph: AGF/Rex

And here’s why. In a functional market economy, the classic couple in a posh restaurant are young and close in age. In my travels through the euro crisis – from Dublin to Athens – I have noticed that the classic couple in a dysfunctional economy is a grey-haired man with a twenty something woman. It becomes a story of old men with oligarchic power flaunting their wealth and influence without opprobrium.

The youth are usurped when oligarchy, corruption and elite politics stifle meritocracy. The sudden emergence of small centrist parties led by charismatic young professionals in Greece is testimony that this generation has had enough. But by the time they got their act together, Tsipras was already there.

From outside, Greece looks like a giant negative: but what lies beneath the rise of the radical left is the emergence of positive new values – among a layer of young people much wider than Syriza’s natural support base. These are the classic values of the networked generation: self-reliance, creativity, the willingness to treat life as a social experiment, a global outlook.

When Golden Dawn emerged as a frightening, violent neo-Nazi force, with – at one point – 14% support, what struck the networked youth was how many of the political elite pandered to it. People who had read its history could see a replay of late Weimar flickering before their eyes: delusional Nazis feted by big businessmen craving for order.

I’ve reported the Greek crisis since it began, and what changed in 2015 was this: Syriza had already won the solid support of about 25% of voters on the issues of Europe and economics. But now a further portion of the Greek electorate, above all the young, are signalling they’ve had enough of corruption and elites.

Greece, though an outlier, has always been a signifier, too: this is what happens when modern capitalism fails. For there are inept bureaucrats and corrupt elites everywhere: only the trillions of dollars created and pumped into their nations’ economies to avoid collapse shields them from the scrutiny they have received in Greece.

We face two years of electoral uncertainty in Europe, with the far left or the hard right now vying for power in Spain, France and the Netherlands. Some are proclaiming this “the end of neoliberalism”.

I’m not sure of that. All that’s certain is that Greece shows how it could end.

Greece shows what can happen when the young revolt against corrupt elites | Comment is free | The Guardian

Syriza’s historic win puts Greece on collision course with Europe

Ian Traynor, Europe editor Monday 26 January 2015

Greek voters reject EU austerity for radical alternative of far-left party, which falls just short of an overall majority

Supporters of the opposition Syriza party cheer the results in Athens, Greece. Photograph: Milos Bicanski/Getty Images Europe

European politics has been plunged into a volatile new era following a historic victory in Greece’s general election by far-left radicals committed to ending years of austerity.

More than five years into the euro crisis that started in Greece in October 2009 and raised questions about the single currency’s survival, Greek voters roundly rejected the savage spending cuts and tax rises imposed by Europe which reduced the country to penury.

Voters handed power to Alexis Tsipras, the charismatic 40-year-old former communist who leads the umbrella coalition of assorted leftists known as Syriza. He cruised to an eight-point victory over the incumbent centre-right New Democracy party, according to exit polls and projections after 93% of votes had been counted.

The Guardian view on the Greek election: a new deal for a new era

Editorial: Syriza’s victory is a rejection of the toughest austerity regime in the Eurozone and should be respected

The result surpassed pollster predictions and marginalised the two mainstream parties that have run the country since the military junta’s fall in 1974. It appeared last night, however, that Syriza would win 149 seats – just short of securing the 151 of 300 seats that would enable Tsipras to govern without coalition partners.

“The sovereign Greek people today have given a clear, strong, indisputable mandate,” Tsipras told a crowd of rapturous flag-waving party supporters. “Greece has turned a page. Greece is leaving behind the destructive austerity, fear and authoritarianism. It is leaving behind five years of humiliation and pain.”

Greece’s incumbent prime minister, Antonis Samaras, whose conservative-dominated coalition had been in office since June 2012, conceded defeat early in the evening and admitted that “mistakes and injustices” had been made but insisted he was leaving office with a clear conscience. “I assumed charge of a country that was on the brink of collapse … and we restored its international credibility,” said Samaras.

Tsipras’s victory, widely predicted, was nonetheless stunning in scale and in impact. Single-party majorities are very rare in parliamentary systems in Europe these days, in recent years occurring in only Hungary and Slovakia under strongman leaders of the right and left. For an upstart party such as Syriza, which has never been tested in power, the victory highlighted how five years of fiscal orthodoxy in Europe have turned politics upside down.

“I just voted for the party that’s going to change Greece; in fact, the party that is going to change the whole of Europe,” said Panagiotis, 54, a self-employed electrician voting in the Kipseli district of Athens. “There has to be change, big change. The economy has collapsed … Syriza is Greece’s hope.”

Alexis Tsipras raises his fist to supporters after winning the elections. Photograph: Giorgos Moutafis/Reuters

The damning popular verdict on Europe’s response to financial meltdown is a haunting outcome for the EU’s political elite. For the first time, power has been handed to populist outsiders deeply opposed to Brussels and Berlin, albeit not anti-European, unlike their counterparts on the far right across the EU. For the first time a child of the European crisis, an explicitly anti-austerity party, will take office in the EU.

“There’s a sense that these populist movements are led by people who didn’t go to university with [the leaders] and that if you ignore them they will go away. They’ve been ignored and patronised,” said a senior EU policymaker in Brussels. “The underlying causes are economic. We want a Europe that is delivering tangible benefits to citizens. That’s not what it feels like at the moment.”

The result throws into question whether Greece will remain in the Eurozone and the union overall, sets a precedent for anti-austerity insurgents elsewhere in Europe – notably in Spain, which will hold elections this year – and underlines public rejection of the policies prescribed mainly if not exclusively by Berlin in recent years.

Tsipras now holds Greece’s European fate in his hands. Athens and its creditors – the EU and the International Monetary Fund, which have bailed the country out to the tune of €240bn (£178bn) since 2010 – will spend weeks in wrenching negotiations over the terms of continued assistance and whether his new government will do enough in terms of further cuts and reforms to keep Greece in the euro.

Syriza party supporters celebrate in Athens. Photograph: Aris Messinis/AFP/Getty Images

Neither side wants Greece to crash out of the currency. But positions are very far apart, and currently unbridgeable. While the German central bank promptly declared that Greece needed more loans but only on Eurozone terms, senior Syriza figures announced that the bailout diktat was “dead”.

“Grexit is unthinkable,” said a second senior Brussels policymaker involved in the negotiations. “It would be extremely bad. Europe is about irreversibility. If you start doubting that, you start pricing in the risk of fragmentation and soon you have no monetary union. The only chance of Grexit is if Greece defaults on its payments. Morally, that would be saying they want to leave.” A default would trigger a run on the banks, capital flight and capital controls.

The clock is already ticking. When the German chancellor, Angela Merkel, French president François Hollande, British prime minister David Cameron et al assemble for an EU summit in Brussels in just over a fortnight, they will be joined at Europe’s top table by Tsipras, probably the only man there not wearing a tie. The symbolism will be enormous. Europe’s anti-mainstream mavericks and populists are no longer just hammering on the doors.

Profile: Alexis Tsipras, Syriza leader who looks set to take charge in Greece

Man likely to become Greece’s youngest prime minister appears determined to jolt not only his own country, but Europe too

Before that summit on 12 February, Tsipras, say people involved in the negotiations, will want to have already fleshed out the contours of a deal. Berlin and Brussels have been quietly sending envoys to Syriza, including Tsipras, for weeks. He has been “perfectly reasonable”, say senior Brussels sources.

Greece’s current bailout expires at midnight on 28 February. Without agreement to extend that programme, probably until the summer, Greece’s banks will be unable to borrow normally and will depend on emergency liquidity, effectively living on an overdraft. There is up to €7bn available to Greece if it strikes a deal.

“They have to ask for an extension of the programme. If they don’t, they go belly up,” said a second policymaker. “We’re counting on their seeing their enlightened self-interest and getting the money to pay the bills.”

But another senior figure in Brussels was less optimistic: “Do we know that Germany or Finland will agree to a new programme?”

Tsipras has pledged to rewrite the terms of the bailout that dates from 2012 by trying to ease the fiscal orthodoxy defined by Berlin and achieving some form of write-down or relief on the country’s national debt of €320bn or 175% of GDP.

It is not clear how he can achieve this in the time available. Tsipras and Samaras both reject the EU terms. Samaras has been stalling since last June on the EU-IMF review of the Greek shakeup tied to the bailout.

Ironically, the Eurozone is asking Tsipras, who won on a hard left anti-austerity rejectionist ticket, to go further than Samaras was prepared to go. Samaras and Tsipras want an end to the “humiliating” rescue programmes and their oversight by the hated troika of officials from the European commission, European Central Bank and IMF. But it is not clear how, without the creditors writing off much of the loans. This is rejected by the IMF and the ECB and is politically unacceptable at home, especially to Merkel who fears it will encourage other ailing Eurozone economies to shirk their sides of the bailout bargains while boosting Germany’s own growing anti-euro movement.

In early trading this morning the euro fell to near an 11-year low of $1.1135 following the result of the election, not far off an 11-year low of $1.1115 touched on Friday.

Besides, if freed of what it sees as the tyrannical terms of the bailout conditions, Greece is not in a position to fund itself. Its borrowing costs are currently nudging 10%, way beyond the affordable.The German government initiated parliamentary procedures last month with a view to setting up a “precautionary” fall-back programme for Greece under which the country would try to fund itself on the markets, but have a Eurozone cushion if that was not possible.

The German move, extremely unwelcome in Athens where the political imperative is liberation from bailouts, was seen as clumsy interference in the election. In return, the Greek outcome will now affect German domestic politics.

Tsipras’s triumph – itself a direct result of the EU’s austerity policies, although those were preceded by three decades of cronyism, nepotism and corruption which became the system in Greece – will resonate strongly beyond the Balkans, throwing up sharp questions about the policy shortcomings of the elites and their failure to get to grips with the new populist forces challenging their right to rule.

Greek election: ‘The hour of the left has come. Hope has arrived’

Euphoria among Syriza supporters as once-marginalised activists take power – but party knows the hard work begins now

The Podemos upstarts in Spain, the Five Star anti-establishment mavericks of Beppe Grillo in Italy, and Gerry Adams’s Sinn Féin in Ireland will all relish the Syriza victory.

Other major mainstream figures in the EU will also be quietly hoping that Tsipras can mount a credible challenge to the Merkel ascendancy and secure a shift in Eurozone policymaking – leaders on the centre-left such as Hollande in France and the Italian prime minister, Matteo Renzi.

The result will also chasten mainstream leaders, many of them facing elections this year across the EU as they seek to neutralise their own domestic Eurosceptic and anti-establishment forces.

“Everyone knows Europe today is a continent with no growth, no inflation, high unemployment. It’s very hard to tell people that Europe is the solution, that it has the answers. What is Europe for?” asked one of the three senior figures in unusually pessimistic remarks.

“The results of the European elections [last May] have seen anti-European parties raging everywhere. That’s discontent with the European project. There is always an economic basis. The next election could be rejection of the project and there’s nothing left.”

Syriza’s historic win puts Greece on collision course with Europe | World news | The Guardian

The Greeks Head to the Polls, Many Saying ‘Enough’

Editorial Observer By SERGE SCHMEMANN

Alexis Tsipras, the leader of the Syriza party. Credit Yannis Behrakis/Reuters

ATHENS — Driving along a broad avenue lined with restaurants, the Greek man at the wheel points to the trash cans. Every night, he says, people rummage through them for scraps of food. His two well-educated daughters cannot find jobs; more than half of Greek youths have no work, and the jobs that do appear are often short-term and lacking in benefits.

Such stories of misery are legion after six years of economic crisis — including stories of suicides, of housewives turning to prostitution. Listening to them, the only surprise in the rise of the left-wing Syriza party, which is expected to come in first in Sunday’s general election, is that it has taken so long for an anti-austerity party to come to the fore.

Alexis Tsipras, Syriza’s charismatic 40-year-old leader, has been campaigning under the banner “Hope is on its way.” He has vowed to undo the austerity program mandated by the troika of international creditors — the European Commission, the European Central Bank and the International Monetary Fund — and at the same time to somehow reduce the country’s debt and remain in the Eurozone. Fulfilling these contradictory promises may not be possible, but to a lot of people that’s not the point — voting for Syriza is another way of saying “Enough.”

The incumbent prime minister, Antonis Samaras, has insisted that the radical left wants to drive Greece out of the euro, and that the only path for Greece is to stay the course of painful reforms and budget cuts that he has led.

Recent opinion polls showed Mr Samaras’s centre-right New Democracy party only four to six percentage points behind Syriza. So even if Syriza does come in first, it will probably need a coalition to form a government. Given the variety of parties and passions likely to come out of the elections, the next government may not be around for long.

All this makes for a frightening welter of unknowns as voters approach decision time. If Mr Tsipras goes ahead with his promise to cut taxes and restore social spending without finding new sources of funding, the “troika” bailout could be cut short. Without the bailout, Greece would face the risk of a default on its massive sovereign debt. And failing to meet its debts would raise the possibility of a “Grexit,” a Greek exit from the Eurozone.

Though Chancellor Angela Merkel of Germany, who has the decisive say in what demands to make of Greece, insists she wants Greece to remain in the Eurozone, the possibility of a Greek exit is no longer regarded in Berlin and Brussels as necessarily an unmitigated disaster.

For the Greeks, however, it would be, most likely plunging the country into recession, and the large majority of Greeks want the country to remain in the single currency.

In any case, Mr Tsipras has given signals that he may be open to a more sensible course than his radical party platform. Polls show that a strong majority of Greeks, 61 per cent, want consensus in talks with the troika, and the optimistic scenario is that his left-wing credentials would give him the credibility to urge more patience.

Another question is whether Berlin and Brussels really mean their tough talk about Greece. Mrs Merkel repeated in her keynote speech at Davos that Greece must accept responsibility for its mountain of debt. But there seems to be a growing sentiment among economists in Europe that debt relief is essential to bringing the Greek economy back from the depths. Whether Greeks “deserve” punishing austerity after years of profligacy, as many in northern Europe continue to maintain, is not the right question. The question is how to allow Greece to move forward and to avoid a political catastrophe that would inevitably have ramifications for the rest of Europe.

Mr Tsipras or whoever wins Sunday’s election must understand that there is no easy, painless exit out of Greece’s troubles. But Germany and the troika must understand that sticking with their flawed and dogmatic insistence on austerity can only create more misery and desperation — and a more radical response next time.

The Greeks Head to the Polls, Many Saying ‘Enough’ - NYTimes.com

Greek election: Rena Dourou of Syriza poised to sweep away austerity

By Nick Squires, and Menelaos Tzafalias in Athens 22 January 2015

“Is it really right for thousands of people to commit suicide because of austerity policies?" asks Syriza's most senior politician ahead of Sunday's general election

Newly elected governor of the wider Athens region Rena Dourou, who was backed by leftist Syriza party, waves to supporters in front of the University of Athens Photo: REUTERS

After her mother’s pension was cut over 30 times, Rena Dourou knew that Greece could no longer cope with austerity.

Now, as Syriza, her political party, leads the polls ahead of the country’s general election on Sunday, she stands ready to reverse the five years of pain imposed by the European Union.

“Since the beginning of the implementation of the austerity policies, many people have had the experience of becoming second-class citizens, with no access to health care or education,” she said.

“We want to create a shield of protection for the most vulnerable.”

Ms Dourou, 40, is the only member of Syriza, a radical left-wing coalition, to hold high office. Since she was elected as governor of Attica, the vital region that surrounds Athens, last May she has increased the state’s budget for social welfare more than six-fold, from a mere Eu1.9 million (£1.46 million) to Eu13 million. It is a premonition of the huge spending splurge that Syriza has promised if it is elected nationally.

Under her leadership, the regional government, which has four million people under its administration, has also started restoring the electricity supply to impoverished families who could no longer pay their bills - as Alexis Tsipras, the leader of Syriza has also promised to do on a national level should he be elected.

Syriza’s popularity is testament to the disillusion and anger felt by many Greeks towards the political establishment.

The two main parties, the socialist PASOK and the centre-right New Democracy, are regarded by many Greeks as having kept themselves in power for decades through corruption and cronyism.

Their time is now up, said Ms Dourou, who studied political science at the University of Essex and speaks five languages.

“Is it really right for thousands of people to commit suicide because of austerity policies? Is it really right that a whole people has to pay the heavy price for a completely wrong policy?” she asked, insisting that austerity had not managed to cure Greece of its debts.

But she added that Greece would pay its debts and described the prospect of a “Grexit” - a Greek exit from the euro zone and a return to the drachma - as “simple scaremongering” by the government. “It’s propaganda which is being used in order to scare the Greek people and prevent them from voting for Syriza. Syriza does not represent any kind of risk for the euro.”

Analysts believe Mr Tsipras may have to drastically tone down his demands for a debt write-off once he is in power, particularly if he fails to secure an absolute majority in the 300-seat parliament.

That would force him into an alliance with one of several smaller, more moderate parties that are jostling for votes.

But for now, Syriza’s message is defiant.

“The most dangerous thing for the euro and the European project is the policy of austerity, which kills growth and employment,” said Ms Dourou.

“We need policies which can bring about social justice and equality. That’s what the Greek people are about to vote for.”

A survey published over the weekend in To Vima, a newspaper, showed Syriza’s lead over the ruling New Democracy widening slightly to 3.1 percentage points from 2.5 percentage points a week earlier, the first time it has widened its lead since November.

Greek election: Rena Dourou of Syriza poised to sweep away austerity - Telegraph