Greek electoral earthquake.Syriza wins big victory. New post austerity era in European politics to follow ?

There is much joy in Athens today. The anti austerity left of centre coalition Syriza led by Alex Tsipras has brought hope to millions of Greeks that new policies which will promote lower unemployment, fight poverty and reduce hardship will be at the forefront of government policy in Greece after six long years of horrible hardship and depression levels of unemployment in Greece. The political mandate for this change is crystal clear. The final vote count will not be available for some hours but a 70 % official count and extensive exit polls confirm that Syriza has captured about 36.1% of the vote and as many as 149-151 seats in the 300 seat Parliament. The old pro austerity government of New Democracy led by the outgoing prime minister Antonis Samparas lost half of its seats, received 28% of the vote and will have about 77 seats in parliament. In third place with 17 seats and 6.4 % is the fascist party Golden Dawn. Narrowly behind it is the centre left formation To Potami with 16 seats and 5.9% of the vote. To Potami is a potential ally of Syriza in the Parliament. The communist party KKE has 5.4 % of the votes and will have about 13 seats, as will the former governing party Pasok with now just 4.75% and 13 seats. One other small party has 4.7% and 13 seats.

The new party formed by the former leader of Pasok and Prime Minister George Papandreou from a family that has produced three Greek prime ministers
has failed to get above 3% and hence will have no seats in Parliament.

The first major hurdle which Syriza will face will be its commitment to renegotiate the terms of the austerity imposed on it by the IMF and its EU creditors led of course by the austerian in chief  German leader Angela Merkel.She and her finance minister have insisted that there will be no renegotiation of the terms, no haircut on Greek debt and no continuation of bailout money without continued austerity. But this is easy for her to say but in practice may well turn out more difficult to achieve in practice. Already in a victory speech the new to be named Prime Minister Alex Tsipras has declared an end to “the vicious austerity” imposed on Greece.

Since the terms of the current deal expire in any case at the end of February there is a neeed to negotiate new terms. The emergence of quantitative easing in Europe at the ECB also gives new possible options to the EU. Why not for example allow Greece easier and somewhat greater access to the QE that will be available than what was originally announced. Other options include prolonging the term of the debt, taking full advantage of the low interest rates available in Europe with QE in place, developing a separate infrastructure investment and employment program in Greece and other needy member states that can be financed over the long term by pledged funds  or if need be by a second currency in Greece restricted to infrastructure and backed by Greece’s very substantial gold and silver reserves. One way or the other the rules of the game are changing. Syriza’s victory has and will reinforce the determination of other anti- austerity parties in Spain,France,Portugal even in Germany to promote policies which can restore prosperity and humanist values to their countries and Europe as a whole.


About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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