Greek election results match January’s, but with more favorable implications for the world

The situation in Greece and its relationship with the rest of Europe went through huge and dramatic changes since Prime Minister Alexis Tsipras and his Syriza party convincingly won January’s elections. Surprisingly, you would not know it from Sunday’s election results, which very closely matched January’s. Syriza’s coalition with the Independent Greeks party looks to have lost seven seats in total, but will still have a five seat majority in the 300-seat parliament. There will be no need to bring in an additional party after all, unless Tsipras decides to fatten his majority in exchange for some modest compromises and a granting a few positions in the government. (See the end of this post for the details of the results.)

The implications

The meaning of this election, however, is far different than that of January’s. Then, Syriza represented a radical shift to the left and towards confrontation with Greece’s European partners and other official creditors (what I will call “Europe,” for short.) The next six months witnessed massive confrontation with Europe, leading, among other things, to the temporary closure of Greece’s banks and continuing capital controls, along with a serious hit to the economy. The risk of Greece falling out of the Euro briefly spiked to as much as 50 percent before a deal was reached in which Greece agreed to accept the great bulk of Europe’s demands in exchange for more funding.

Now, Tsipras and his party support implementing the deal with Europe, despite campaigning vociferously in January against most of the provisions. They do not like many of the terms, but they have accepted that Greece cannot win this argument and that it is in their nation’s best interests to stay in the Eurozone. This is what the large majority of the voters think as well, which explains Syriza’s ability to survive backtracking so far on its earlier promises to resist Europe’s demands. So, expect a lot of fighting between Greece and Europe as the details of the deal’s implementation are worked through, but it would be very surprising if the fundamental agreement falls apart.

It has been easy to point out how badly Tsipras and his government did in their negotiations with Europe and to make snide (and justified) remarks about the “game theory” expertise of his former finance minister, Yanis Varoufakis. However, the real master of game theory may actually be the prime minister. For all of the pain suffered by Greece, it is worth contemplating what Tsipras has achieved for himself and his party. He reached a deal with Europe that provided many tens of billions of euros of new funding and he did this without losing significant votes despite performing an impressive political “somersault,” as the Greeks call political flip-flops. He rid himself of a very troublesome hard-left opposition within his own party that then failed to even gain the minimum votes to enter parliament as a new party. On Sunday, he secured a new majority that may well keep him and Syriza in power for four more years. I do not mean to suggest that he deliberately traded off Greece’s problems for his political gain, but rather to underline what a brilliant politician he seems to be. Whatever his faults at the European level, he is clearly a master of Greek domestic politics.

This election result could prove to be the best outcome in terms of avoiding another damaging period of severe confrontation with Europe. The main opposition parties are more pro-European than Syriza, which makes it unlikely that they will seek or find a way to derail government attempts to implement the agreement. They will definitely fight certain items and will try to make political hay out of unpopular requirements that are forced through by the government, but there is a limit to how far they will go. On the other hand, a Syriza party in opposition might have created considerably more problems for a New Democracy-led government, although it would have been unlikely to formally repudiate the overall agreement.

The pessimistic counter-argument would be that Syriza’s ministers have very little government experience, believe that substantial parts of the agreement are wrong-headed, and are strongly leftist, not accepting many of the underlying assumptions of the other European governments about how the world does and should work. (There is a reason that Greece’s official English version of its name is the “Coalition of the Radical Left.” These are not social democratic leftists, but represent a more radical challenge to capitalism as practiced in Europe.) There is a chance they will manage the economy and the country badly and will generate excessive friction with their neighbors/funders. However, I am hopeful that the most important point is that they will follow through on the deal with Europe, which will force them to act against many of their anti-market instincts.

The details of the election results

Syriza won again, with 35.5 percent of the vote, less than a percentage point less than last time, and 145 seats, down from 149 seats. Its principal rival, the center-right New Democracy party, won 28 percent, the same as last time, and 75 seats versus 76 seats. (The largest party gets a 50-seat bonus, which is why the seat differential between the two parties is so big.) The hard-left Syriza faction that broke with Tsipras to form its own party failed even to obtain the 3 percent vote level that would have earned it seats in parliament, although they came within a whisker of succeeding. All the other parties came in about where they did last time, with a percentage point or two of movement at most in their results.

Tsipras has reached out to the Independent Greeks party, Syriza’s current coalition partner, to form a coalition again. (Their 10 seats would bring the government to 155 seats out of 300.) The Independent Greeks are a right-wing nationalist party that disagrees with the strongly leftist Syriza party on most things, and they opposed Tsipras’ deal with Europe, but they are unlikely to resist the lure of government office. Their leaders will argue that Syriza is the major party that will push back hardest against the Europeans as the details of the implementation of the summer’s agreement are nailed down, which may be true.

Syriza will have the option farther down the line of bringing one of the other small parties into the coalition government if a five-seat majority proves too shaky, but they appear not to be planning to start that way.