This country is nearing the close of a tumultuous year, which was profoundly marked by three milestones in the calendar when its citizens took to the polling stations to express their desire for change and the need to end five years of tough austerity measures.
The legislative election on 25 January was the first of these key dates, resulting in the main opposition party, the Coalition of the Radical Left (Syriza) sweeping to power with a popular mandate and a clear promise to put an end to the humanitarian crisis, kick-start the economy and employment, and extend democracy.
To this end, Prime Minister Alexis Tsipras’s government clearly stated that its two main lines of negotiation with foreign creditors and European institutions would be designed with a view to ending adjustment policies and restructuring the national debt.
At the end of 2014, 69% of Greece’s high level of debt was held by the International Monetary Fund (IMF) and the countries of the Eurozone, while only 12% was in private hands.
Tsipras repeatedly assured his European partners that he would uphold the country’s commitments with regard to the European Union and the Eurozone, regardless of the circumstances.
From the outset, negotiations with the European Commission (EC) and Eurozone leaders were characterised by an unusually harsh tone, and the Greek leader recognised that “the most difficult part begins now”.
Agreements between Athens and the European institutions were phrased with calculated ambiguity and broad generalisations, leaving them open to vastly different interpretations by the various actors.
At the time, the European Central Bank (ECB) was reducing the possibility of providing economic assistance or lines of credit of any kind, which could have sustained the liquidity of the Greek financial system or that of the State itself.
At a domestic level, the government had to comply with changes that were more symbolic than they were effective, by adhering to the calculations imposed upon it and meeting important debt repayment deadlines.
This meant that the so-called National Reconstruction Plan, which aimed to “reverse social and economic disintegration to return to the path to growth,” stalled when faced with a lack of funding and blocking by the creditors.
The humanitarian programme designed to address the unfolding social catastrophe and raise levels of protection for the most vulnerable groups was also reduced considerably, owing – once again – to a lack of funding.
Other measures implemented from the outset included the reduction of important budgetary line items for the administration, the elimination of health-related taxes, the freezing of the privatisation programme and the closure of detention centres for undocumented immigrants.
The six-month deferral imposed upon Greece for the negotiation of a new memorandum expired at the end of July without any agreement having been reached on the major issues and with the State coffers having run dry, leaving a shortfall of €1,530 million owed to the IMF.
The Greek government rejected the final proposal, drafted by the President of the European Commission, Jean-Claude Juncker, deeming it “unacceptable”.
This resulted in a forced banking closure imposed by the ECB from its position of strength and led to a referendum being called on 5 July for the Greek public to express its opinion.
Despite torturous pressure from the creditors and the widespread fear among Greek citizens that the closure would be prolonged, this second date with the ballot boxes ended with clear support for the government from 61.3% of voters, who rejected the proposal from Brussels.
It was, however, an unexpected – even incomprehensible – outcome for many sectors of the population, since Tsipras found himself heading toward an even harsher deal when the Eurozone countries issued the ultimatum: “memorandum or bank closures and expulsion from the Eurozone,” according to the ex-Finance Minister, Yanis Varoufakis.
The Greek leader justified his difficult decision, saying that it was taken “for the purposes of avoiding the application of even more extreme plans imposed by the EU’s ultraconservative forces,” referring to Germany’s determination to expel Greece from the single currency at any cost.
This abandonment of its principles cost the government a large proportion of the popular support that SYRIZA had enjoyed and caused a major rift within the party, which lost dozens of members of parliament and leadership teams who mainly belonged to the so-called mainstream left.
Lacking a majority in the National Assembly, Tsipras decided to call early elections to secure a new parliamentary majority and a new mandate with different criteria, scheduling them for 20 September.
With these elections looming, Syriza signed a document committing it to comply with the third bailout package, but positioned itself to implement progressive policies to “minimise the negative effects and continue negotiating hard with all stakeholders who remain open-minded”.
Despite losing an important number of votes, along with all other parties, Syriza became the dominant party in Greece for a third time and was able to form a new government with the support of the Independent Greeks party from the nationalist right.
Expressions of unhappiness and rejection from workers, pensioners and other sectors of society quickly followed. The government hopes that a change in the balance of power on the continent could put an end to debt and austerity. (PL)
(Translated by: Roz Harvey)