One could almost hear the collective sigh of relief throughout Europe and especially in its markets when the results of Greek parliamentary elections became final Sunday. The first-place showing of the New Democracy — center-right party — and the first crack at forming the next government going to its leader Antonis Samaras suggest that Greece will honor its international bailout agreement and not leave the eurozone and the euro currency.
With 99.78 percent of the vote in, New Democracy had 29.66 percent of the vote, or 129 out of the 300 seats in the parliament. The Coalition for the Radical Left (Syriza), which was the source of much of the nervousness in Europe and Greece???s creditors, came in a close second with 26.89 percent, or 71 seats. Pasok (Socialists), which had ruled Athens until the government nearly went underwater and required the bailout last year, came in a distant third with 12.88 percent of the vote and only 33 seats in parliament. Little-reported but potentially critical was the best-ever showing of the anti-immigrant, anti-EU Golden Dawn Party, which won 6.92 percent of the vote and a record 18 seats.
Samaras will clearly have to turn to the Socialists as well as smaller parties on the center-left to form a government. Should he fail to do so, then it would be the turn of Syriza???s 37-year old leader Alexis Tsipras, the onetime Communist Party youth member whose rhetoric shook Greece???s creditors: the European Union, the European Central Bank, and the International Monetary Fund — of which the U.S. is the largest shareholder, since the Democratic-controlled Congress in 2009 voted the financial titan an additional $100 billion for loans above its regular assessment at the request of President Obama.
???Scrap the memorandum!??? declares Tsipras, the ???memorandum??? being the term Greeks use for the austerity measures. Writing in the Financial Times last week, the far-left leader (who has been likened to Castro and never wears a tie) called for replacing the memorandum with a ???national plan for reconstruction and growth.??? What that means is higher taxes on wealthier Greeks, levying new taxes on the shipping industry for the first time, and abandoning the 50 billion-euro privatization program agreed upon by the EU and the IMF.
If this ???growth??? plan sounds familiar, it is because it is so much like other plans on the left in which ???growth??? means no move whatsoever toward private sector initiatives and higher taxes on the most productive of society.
In his own words, Tsipras is a redistributionist. He writes in the Financial Times of ???reforming the tax regime so as to identify the wealth and income of all citizens and to distribute equitably the burden of taxation.???
As to how a Tsipras government???s plan to end the austerity measures that accompany its loan affects the U.S. and Europe, it should be noted that the far-left candidate never spells out how or even if he would pay back the first installment of the loan that Greece has so far accepted to keep its government afloat — and that is in part backed by U.S. tax dollars, through their IMF support.
In the closing days of the campaign, Tspiras toned down his rhetoric against such creditors as the EU and IMF. He insisted ???my movement, Syrzia, is committed to keeping Greece in the eurozone.??? But the EU has made clear that honoring the terms of its loan agreement is a necessity for remaining in the eurozone.
???Gambling??? and ???rolling dice??? is what Samaras branded this policy. Obviously, more voters agreed with him — for now.
The failure of either Samaras or Tsipras to form a government points to a third national election. The true-to-life Greek tragedy, then, has at least more acts to follow.