Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle

While Alexis Tsipras gears up for a prolonged austerity battle with Brussels and Berlin, the radical leftist surprises many with the recruitment of 'zany' centre-right partners

Greece’s newly appointed Prime Minister, Alexis Tsipras, at a ceremony in Athens yesterday, marking the execution of Greek resistance members by the Nazis during the Second World War (Reuters) (Reuters)

The radical left leader Alexis Tsipras was sworn in as Prime Minister of Greece today after the decisive victory of his Syriza party over establishment parties supporting the European Union programme that has impoverished so many Greeks.

Mr Tsipras was swiftly able to form a government by reaching an agreement with the Independent Greeks, a small party on the right that is adamantly opposed to austerity and the Troika that has overseen the implementation of the EU and IMF’s terms for a bailout. Mr Tsipras’s surprising choice of political partner shows that he expects a prolonged confrontation with the EU and needs an ally that, above all else, is hardline on the main economic issue.

Georgios Katrougkalos, a Syriza MEP, said a deal with the Independent Greeks, who are close to the Orthodox Church and prone to zany conspiracy theories, is “not ideal”, but the two parties were united in their opposition to EU tutelage. Social issues, such as the Independent Greeks’ tough line on immigration, were not a priority at the moment.

Syriza had been expected to look to the centre left To Potami and officially socialist Pasok parties to give it a majority in the new parliament, where it holds 149 out of 300 seats. But Mr Katrougkalos said that both these parties were ruled out because of their commitment “to neo-liberal economic policies, favouring privatisations and the removal of laws protecting labour”.

He added that Syriza intends to curb the powers of the Greek oligarchs to whom To Potami and Pasok were close, saying their ability to evade tax and break state regulations with impunity must be ended. In the short term, the speed with which a government has been formed reduces the sense of uncertainty in Athens.

But confrontation with the eurozone leaders is expected to come soon and Greece could be facing an economic siege as the EU cuts off fresh supplies of credit. Syriza no longer wants to negotiate with the Troika (European Commission, European Central Bank and the IMF) but to talk directly to the governments concerned.

A Syriza spokesman said the new government had no plans for further talks with the Troika. At the same time, Syriza has made clear that it does not want to leave the euro or default on its debts, options that would be devastating to Greece but damaging to the credibility of the EU, which has spent five years trying and failing to solve the crisis.

There is no doubt Syriza sees its victory as part of a Europe-wide campaign against neo-liberal policies that are facing growing opposition, particularly in Spain, Italy and France. It is a measure of the international focus on the Greek elections that out of over a thousand journalists accredited to cover the poll some 500 are foreign correspondents, of whom 101 are Spanish, 94 British, 70 Germans and 33 Japanese. Greece may therefore be less politically isolated than it has been in the years since 2010. There is also a growing acceptance internationally that Greece cannot ever pay back its €317bn (£237bn) debt and needs money to escape from recession that has seen its economy reduced by a quarter.

Syriza may be expecting a battle with the EU but is being careful not to sound too aggressive. Yanis Varoufakis, a Syriza member who is tipped by some to become the next Finance Minister, said yesterday: “We, who happen to be in the eurozone, must be very careful not to toy with loose and fast talk about Grexit or fragmentation. Grexit is not on the cards; we are not going to Brussels and to Frankfurt and to Berlin in confrontational style.”

Even so, Mr Tsipras is going to need all the international sympathy he can get because he faces an unequal contest with Berlin and Brussels whom he must confront but also borrow money from. The Kathimerini newspaper in Athens warns that, on becoming Prime Minister, Mr Tsipras will find “empty coffers, a merciless European leadership and a party [Syriza] as diverse as the Tower of Babel”. It admits that he is “the rock star of the international left”, but wonders what he will do when “he hits the wall at the European Central Bank”. At the same time the paper comments that the upper classes in Greece must adjust themselves to the new situation.

Asked how Syriza planned to raise the billions needed to pay for social action to alleviate the effects of austerity, such as free electricity for those who have been disconnected, Mr Katrougkalos says: “We will find the money from the tax evaders.” Other reforms include the raising of the minimum wage to €750 per month and relief for private debt. The crisis in Greece over the past five years means that four million out of 11 million Greeks live in poverty and youth unemployment is a staggering 57.5 per cent.

Inequality has grown, too. Before the crisis 10 per cent of the population owned 40 per cent of the wealth but they now own 50 per cent. A telling sign of poverty is the smog that shrouds Athens when it gets cold. Costas Zachariadis, a biologist and Syriza candidate in the capital, said the smog comes because people are too poor to pay for electricity or gas to heat themselves “so they burn old doors, garbage or anything they can find: the smog is becoming very dangerous because Athens now has an atmosphere like London in 1952 [when smog killed 3,000 people]”.

The victory of Syriza will deepen social divisions, with the poor and the young voting for the radical left and the better-off and older age groups sticking with conservative parties. Mr Katrougkalos says: “The vote for us was largely a class vote. We have 60 per cent of the poorest two-fifths of people with us.”

Panos Kammenos, the leader of the Independent Greeks party, speaks to journalists after leaving the Syriza party headquarters (EPA)

Q & A: Greece elections

Q : How much time does Greece have to renegotiate its bailout?

A : Not long. Greece’s bailout programme – which totals €240bn since 2010 – officially ends on 28 February. After that, Greece will no longer have access to cheap credit lines from the European Central Bank (ECB). So the first step is getting the European Commission, International Monetary Fund and the ECB – known collectively as the Troika – to agree to extend that deadline.

Q : Will that happen?

A : Probably. Giving Greece more time is one concession that most parties seem willing to make. Mr Tsipras may be resistant to extending a bailout programme which he has actively campaigned against, but it would give both his new government and Greece’s creditors more breathing room for negotiations over the longer-term restructuring of Greek debt.

Q | Then what?

A | The next hurdle is existing debt repayments. Greece owes around €10bn before the end of August. It will need to raise more funds to pay those debts, and unlocking the final €7bn tranche of bailout cash is crucial. So agreement with the Troika on any new terms needs to be reached by the summer. Any default on its debt could be the first step to a Greek exit from the eurozone.

Q | Does anyone want that?

A | Not very many people. Mr Tsipras wants to remain in the eurozone, and so do the majority of Greeks. For once, the German government agrees with the Greek people, with Chancellor Angela Merkel also saying that a “Grexit” is an outcome they want to avoid.

Q | So what are the potential compromise scenarios?

A | The key sticking point is any outright debt forgiveness for Greece. This is a demand of Mr Tsipras, but so far there has been no appetite for such a concession from other EU nations. They are leaning towards an extension of debt repayments, a possible easing of the conditions attached to the loans, and potentially reductions in interest rate payments. A lot hinges on whether such concessions will be enough after Mr Tsipras promised to make the Troika “a thing of the past” in his victory speech.

Charlotte McDonald-Gibson, in Brussels