The news coming out of Greece these days is in stark contrast to the dramatic stories international readers were used to at the height of the financial crisis. From large demonstrations, intense riots, and political instability, the narrative—at least from the financial press—has shifted to praise for Greek Prime Minister Alexis Tsipras and his Syriza-led coalition government for the speed and decisiveness of the reforms they’ve introduced since they were reelected in September 2015.
The hopes of those who voted for Syriza in January 2015 were drowned when the party signed up for more austerity in the elections that followed later that year. Now Tsipras is keen to show the fruits of his sacrifices (as he often labels them in his speeches) and to highlight positive comments from the likes of Bloomberg and the Financial Times. If these voices are to be believed, Greece is on the mend, the crisis is beginning to be overcome, and there are hopes for an era of political stability and economic recovery.
This narrative, however, is built on sand. When Syriza and its coalition partners, the hard-right Independent Greeks, became the latest enforcers of the hard line dictated by Brussels, the EU saw this as a great victory, believing that it would at last bring stability to the tumultuous landscape of Greek politics. In fact, it may have achieved the very opposite.
Greece’s finances are, overall, better than they were a few years ago. Unemployment has been falling (closer to 20 percent now, down from around 27 percent at its height four years ago), industrial production is up, and, if the full shops over Christmas are to be believed, some consumer confidence might have taken hold. But while there is some positivity in the markets, the benefits have been very slow to reach the majority of the people, who watch in dread as their tax bills keep rising. Running a business in Greece is difficult because of the tax burden (individuals and businesses now owe a whopping $120 billion in back taxes), while wages remain very low. And further cuts in pensions (which often support whole families) are coming in 2018. Meanwhile, the debt-to-GDP ratio remains stubbornly high, guaranteeing that austerity will continue for years to come without substantial debt relief, which Greece’s creditors are considering but aren’t exactly keen on.
Tsipras, the country’s youngest prime minister ever, is talented in many ways, but also cynical. While Syriza has pushed through social reforms that no other major party would contemplate—gay marriage, freedom to legally choose your gender, citizenship for second-generation children of migrants—it has also been more than happy to cozy up to Donald Trump, as we saw in Tsipras’s recent US visit, or consider selling weapons to Saudi Arabia. Though one must recognize that Greece’s defense policy is (for better or worse) tied to Washington’s, especially now that Erdogan’s Turkey is becoming a more difficult neighbor, these moves have alienated core supporters of the party. But most of all, it is Syriza’s adherence to austerity that is making the party’s reign very difficult. It is also where our biggest problem lies.