The stunning election victory by the radical left Syriza party in Greece on Sunday has been greeted with delight by the radical left in France. Jean-Luc Mélenchon, founder of the Parti de Gauche, described it as an “historic moment” and quickly put the election result in a wider context. “Perhaps we will have the chance to remake Europe,” he told BFM TV. The national secretary of the French Communist Party, Pierre Laurent, said the victory held out “hope for all those who reject policies of austerity”.
But even as Syriza's charismatic leader Alexis Tsipras formed a government in Athens – with the help of the small right-wing Independent Greeks party - questions were already being asked, both on the Left in France and in the corridors of power in Brussels. What room for manoeuvre will Syriza have as it seeks to end austerity and renegotiate Greece's debts? More widely, can the government of any eurozone country adopt left-wing policies under the zone's current political structures and monetary rules? And in France itself can the various parties and groups on the Left seek to use the Syriza model and its “domino effect” to create their own electoral coalition?
Can the French Left imitate the Syriza example?
Though Tsipras's victory was warmly greeted on the Left, there is a marked lack of agreement on the reasons for the Greek leader's success and the implications for politics in France. At a recent and sometimes lively debate between left-wing politicians at the Paris offices of publishers Les liens qui libèrent, Gérard Foloche, who is on the left of the ruling Socialist Party, said that Syriza's success was due in large part to the activists and elected representatives of Greece's social democratic party PASOK. They, he argued, had stayed united and then thrown their weight behind the new movement. For Mélenchon, however, it was on the contrary Syriza who had held firm against the fragmentation of PASOK after the Greek social democrats had joined a coalition of the centre and Right.
The hesitation in certain parts of the French Socialist Party (PS) itself over just what the Syriza win means could be seen in the party's reaction to Sunday's results. The win was greeted with warm messages on Twitter and other social media, notably from PS first secretary Jean-Christophe Cambadélis, whose father is Greek and who said the result was a “tidal wave against austerity”. But the party did not issue a press release hailing the Syriza win. Though the party has promised to back Tsipras in his impending negotiations with the European institutions, it has shown little or no interest in such popular-based movements, either in Greece or in the case of Podemos in Spain. It should also be noted that the EU commissioner for economic and monetary affairs, Pierre Moscovici, who until early last year was a minister in France’s socialist government, visited Greece in December, apparently to lend his support to the incumbent right-wing government.
So can Syriza's win be a catalyst for change in Europe and create what Mélenchon has called a “domino effect”, and can it help galvanise the French Left into action and unity? There were tentative signs that it could when a diverse range of groups held a meeting in Paris on January 19th (see video below) in support of Syriza. Participants included members of the left wing of the PS, members of the Green alliance EELV, the Nouvelle Donne and supporters of various prominent left-wing figures such as former PS leader Martine Aubry, former economy minister Arnaud Montebourg and former education minister Benoît Hamon. All these various groups sent observers to Athens at the weekend.
Yet to think that the French Left could easily ape the 'Syriza model' would be an illusion. For one thing, the way that political differences are treated in Greece is very different. Syriza's swift decision to form a coalition with the anti-austerity but also right-wing and anti-immigration Greek Independents dampened enthusiasm somewhat for the new Greek government among elements of the French Left. While French right-winger Nicolas Dupont-Aignan warmly welcomed the alliance, such a union is a taboo subject on the Left, which has never had a tradition of allying itself with pro-sovereignty parties from the Right. Nor is the French Left used to the 'proportional representation culture' which can sometimes make strange political bedfellows on certain issues, as now in Greece where the two members of the coalition agree on their opposition to austerity.
Such a change of strategy has never been seriously considered by most of the radical left in France, unlike in Spain where Podemos has chosen to do away with the labels of Left and Right and focus on creating a broad-based popular mobilisation of people opposed to the ruling oligarchy. This is, though, an approach that has been advocated by Mélenchon, who has long feared that Syriza would be too 'social democrat' and who prefers the Podemos approach. However, his communist colleague Pierre Laurent, who is president of the European Left Party, has found it hard to get members of the traditional Spanish hard left - Izquierda Unida - to reach an electoral accord with the new phenomenon of Podemos.
The French Left's uncertainty over how to tap into popular discontent was highlighted in late 2013 when it was faced with the so-called 'red hat' protests in Brittany. Few of the parties on the French Left chose to march with the demonstrators, whose ranks included not just workers but bosses and nationalists. These popular protests bring onto the streets people who reject the system and who currently abstain from voting, and in some cases represents an electorate moving slowly but surely towards supporting the 'anti-system' far-right Front National. So far, however, the French Left has found common cause more on green and financial issues – against the French 'oligarchy' – rather than on more populist subjects.
In any case, the political situations in Greece and France are different. In Greece the Left has fractured for good, split between those who have embraced the liberal economic orthodoxy and those who advocate radical opposition to austerity and the power of the markets. In France, however, the socialist government has sought to downplay its own austerity measures. And France as a country is less to the left than Greece, where PASOK was in power for nearly 30 years from 1981.
Hollande the 'revolutionary'?
Over the next few weeks we will see if President François Hollande intends to try and profit from the 'Syriza effect' by changing his own approach to economic policy. There are those, such as French historian and political scientist Emmanuel Todd, who believe that the French president will end up becoming more and more radical and left-wing in his economic policy under the pressure of events and political calculation. Todd has even spoken of “revolutionary Hollandism”. However, if Hollande continues to be the bard of northern Europe and economic liberalism rather than the herald of southern Europe, then pro-Syriza politicians on the Left in France will be on their own.
So far Hollande has been cautious in his reaction to Syriza's win, though he has congratulated the Greek party. He is clearly wary about expressing too much support for the new government, fearing that he might find himself isolated on the European front as happened when he first tried to tackle austerity policies in Europe soon after his election. Some in Hollande's government have hinted that the president might now play the role of 'intermediary' between Greece and the EU institutions and Germany.

Enlargement : Illustration 2

Are left-wing policies possible in the eurozone?
Hollande should be well-placed to understand the new Greek government’s demands. André Orléan, a French academic who is director of studies at the research training centre the EHESS and a specialist on the eurozone, recalls the similarities between Syriza's programme and the promises made by President Hollande before his election in May 2012. “The policies advocated by Syriza are those promised by François Hollande during his election – to put serious pressure on Germany, to point out that there were other interests and other points of view, to say that Europe is plural in nature, and that it would be good for this pluralism to be heard. It seems to me that François Hollande didn't even try very seriously,” André Orléan told Mediapart.
“You will only save the euro by changing it profoundly, that's to say to stop seeing it solely as a currency that is there to serve creditors. In other words Syriza's is the right policy,” said the academic.
The comparison highlights a fundamental question that was posed, in a slightly different way, by the Financial Times in its recent profile of Tsipras: will Syriza's policies be radical or realistic? Or, in the words of another French economist, Frédéric Lordon, will Tsipras and his ministers “prop up the table” or “knock it over”?
However, Gabriel Colletis, professor of economics at Toulouse University and who has frequently travelled to Greece to follow the internal debates within Syriza, says that the movement's radical policies and realistic approach are not mutually exclusive. “They are both radical and responsible at the same time,” he says. When Alexis Tsipras himself was asked by the Financial Times about his desire to reach a compromise with European counterparts, he replied, ambiguously: “I'm a compromiser because I want to have realistic goals. At the same time, I'm very decisive if I know it's necessary to have a fight.”
From the point of view of economic theory, Syriza's position is not an easy one. It has reopened old debates that have divided the Left in Europe about the virtues of the euro and the room for manoeuvre that any left-wing government has inside the single currency zone. Nearly three years after François Hollande's evident failure to “reshape” Europe, the continent could now finally be about to undergo a fascinating experiment: that of a government on the Left in clear opposition to Berlin, while at the same time abiding by the rules of the euro and the European Central Bank (ECB). However, with the EU treaties as they currently stand, is there room for anything other than another of the lame compromises which all too often work to the advantage of Angela Merkel and the liberal orthodoxes so dear to the Germans? It is now down to Syriza to show that there is.
“The alternatives for Syriza could not be simpler: to give way or to send the whole lot packing,” writes Frédéric Lordon on his blog. “There is no third way. And if Tsipras imagines that he can stay in the euro and obtain more than peanuts, he's kidding himself.” In this economist's view, the room for manoeuvre with Berlin over Greek debt was exhausted in 2012 when the country's debt was restructured, a move which saw private creditors lose money. “To imagine that [the restructuring of Greek debt] could be extended to the public creditors, even more so when one of them is the BCE, is simply daydreaming,” he says.
On paper Alexis Tsipras could not be clearer: there is no question of ditching the euro and going back to the drachma. After an internal debate, Syriza opted in the summer of 2013 to back the status quo, and the 20% or so of the coalition who were favourable to a so-called 'Grexit' – Greek exit from the euro – agreed to abide by the majority decision. Yet many observers, particularly in Germany, consider that Tsipras cannot maintain his promise to keep Greece in the eurozone if he keeps his word on the rest – in particular on restructuring the debt.
But can one in fact both reduce the debt burden down to “sustainable” levels, against the views of some European partners, and yet avoid leaving the euro? Several economists contacted by Mediapart are convinced it is possible. “The restructuring of Greek debt is not in contradiction with it staying in the eurozone. I'm rather inclined to think the opposite, that it is a necessary condition to it staying in,” says Jézabel Couppey-Soubeyran, an associate professor at the Sorbonne in Paris. “If the eurozone wants to continue to exist there needs to be a restructuring, monetising [editor's note, the buying of debts by the BCE] or sharing of debts, or even a bit of all three.”
Greece's public debts stand at 174% of gross domestic product (GDP), the highest in Europe (France's is 95%). This is a total of 314 billion euros, which can be compared with the total of 240 billion euros that have been committed in various plans since 2010 to 'rescue' Greece from defaulting on its debts. Despite years of ferocious austerity, the burden of debt has grown, while the Greek economy has shrunk by a fifth. Under the so-called Maastricht criteria, the debt of eurozone members should not exceed 60% of GDP.
“Inside Syriza today they're debating the amount of the debt that the [new] government should write off,” says Gabriel Colletis, who also blogs on Mediapart. “Some think that you could write off a third of the debt, to get down to around 120% [of GDP], a threshold above which a debt is no longer considered 'sustainable'. Others instead target two thirds [of the debt], to get down to 60%, which corresponds to the Maastricht criteria.” Colletis himself argues for the second scenario. He also calls for an immediate moratorium on the payment of interest on the debt. This, he says, would be enough to finance the “development programme” - which includes an increase in the minimum wage - promised in the short-term by Tsipras and which has been costed at around 12 billion euros.
How will Berlin react?
More cautious observers, meanwhile, speculate about “softer” measures rather than outright default on portions of the debt. These options include lengthening the terms of the loans over dozens of years and reducing the (already very low) rates of interest on loans taken out by Athens. The Brussels think tank Bruegel has made a list of such potential technical options for reducing the cost to Greece of meeting its debts, without its creditors having to suffer outright losses.
Athens could also choose to pay back the debts it owes to European institutions but to default on the debts it has with the International Monetary Fund, putting Greece in a similar position to Argentina in relation to the IMF. This is one scenario imagined by German economist Daniel Gros, who in a briefing note last week downplayed the significance of a Syriza victory, given the record of the last Greek government. “The next few months are thus likely to be full of drama, but in the end, the difference between a government that has never made good on its promises to pay and a government that promises not to pay might not be that large,” he wrote with some irony.
Economist Liêm Hoang-Ngoc, a former socialist Euro MP and the co-author of a report on the actions of the so-called Troika in Greece – the IMF, ECB and the European Union, represented by the European Commission – believes that Syriza's proposals are far from unrealistic. In a recent article in the weekly magazine L'Hémicyle, he wrote: “First of all, Syriza proposes restructuring the debt by an amount that allows them to free 12 billion euros to launch a recovery plan, without which the debt would continue to explode. That is why, secondly, Alexis Tsipras plans to increase [household] spending power to support the recovery and to index the debt repayment to growth.” A key question here is to know which sector to help recover, given the parlous state of the whole Greek economy.
The Greek economy has already been restructured, back in 2012. Private creditors – banks – racked up losses of up to 70% of the value of their loans, without the whole process causing the sort of chaos widely feared at the time. Since then, as Mediapart has pointed out (read here in French), the owners of the Greek debt have changed. It is no longer private institutions but international public organisations such as the IMF, the ECB, the European Stability Mechanism and other eurozone countries who own most – about 70% - of the debt. In theory this transfer is protecting the European financial system from any threat of 'contagion' in the case of an outright Greek default.
Though, economically, there does seem to be some room for flexibility, everything will depend on the attitude of these public institutions once the negotiations to restructure the debt begin. In other words it will all come down to politics, pure and simple. Over and above the labels that some have sought to apply to Syriza – 'radical left' or closet social democrats for example – their victory will remind Europeans of one simple truth that has often been overlooked recently: that to get Europe out of a crisis there is always room to start political discussions, rather than just relying on the 'natural' authority of the markets.
“I'm not saying that the public institutions will easily accept Syriza's demands. For me the main question at the moment is: what's going to be the negotiating strategy of a Syriza government in relation to these public authorities?” asks Gabriel Colletis. He is convinced that things will not drag on for long and expects the new government to announce a cancellation of debts very quickly.
But will Germany accept a so-called “debtors' revolt”? If you believe some observers they will have little choice. “History teaches us that after a debt crisis a balance must be found between the interests of creditors and debtors,” writes Belgian economist Paul de Grauwe, who is a professor at the London School of Economics. “The unilateral approach that has been taken in the eurozone in which the debtors have been forced to bear the full weight of the adjustment almost always leads to a revolt of these debtors. That is now underway in Greece. It can only be stopped if creditors dare to face this reality.”
To judge from the tense reaction in Germany – and also in Finland and from the IMF - since the announcement of the Greek elections, the negotiations between Berlin and Athens have in fact already started. Angela Merkel has taken the trouble to deny rumours published in Der Spiegel at the end of December that suggested she was pondering a possible Greek exit from the eurozone if Athens chose to cancel part of its debt. Her finance minister Wolfgang Schäuble will not even countenance talk of such a scenario. Some economists, such as the Keynesian Peter Bofinger, fear the knock-on effect it will have on Ireland and Portugal if Berlin pushes Athens towards the eurozone exit.
The German strategy can be explained by economic convictions that have not wavered since the start of the debt crisis – those of liberal orthodoxy – but also by the context of a changing domestic political scene. Merkel views with concern the development of the eurosceptic Alternative for Germany party (AfD) which was created in 2013 by academics opposed to the euro and which attracted 7% of the vote at the 2014 European elections. AfD could benefit from the fallout if there were a restructuring of Greek debt, as Germany, which has lent Greece 63 billion euros, would suffer a sharp loss (France has itself lent Greece 45 billion euros). It has become a hotly debated issue in Germany where numerous opinion polls show that a majority of Germans are opposed to such restructuring.
This all highlights the difficulty of a situation in Europe which is being pushed and pulled by contradictory political movements. Syria's victory could be good news in the short term for the future of Greece and the eurozone, as it will at last mean an assault on the root causes of the Greek crisis by means other than those of austerity. But in the medium term it could also reinforce anti-euro groups such as AfD in Germany and force Angela Merkel to toughen her stance on Europe, with the risk that the eurozone itself soon starts to fragment.
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English version by Michael Streeter