It is very often argued that the European Union and the International Monetary Fund got it wrong with the Greek crisis. They overestimated the Greek economy’s resilience and set unrealistic fiscal targets which resulted to excessive and pointless austerity. The wrong economic recipe was accompanied by a series of fatal political mistakes. The failure to foresee the rise of anti-establishment populists to power is top of the list.
This criticism is helpful as it raises fundamental questions about the EU’s policies. It fails, however, to take into account a critical aspect of the Greek case. Despite its failures, the programme agreed by the IMF, the European Commission, the European Central Bank and the Greek government did work. At the end of 2014, the economic figures showed a surplus, a return to growth and a small drop in unemployment. After five years of austerity, everything indicated that Greece was following the same recovery path as Cyprus, Portugal and Ireland. This very short success story was lost in the drama that followed Syriza’s electoral win and subsequent unsuccessful negotiations in early 2015.
Alexis Tsipras’s predecessor, Antonis Samaras, leader of the centre-right party New Democracy, takes the credit for the economic recovery of 2014, but it was his centre-left coalition partner, Pasok, and its moderate wing that did all the hard work. Three of the four Greek finance ministers from 2012-2015 had been members of Kostas Simitis’s inner circle. The fourth was, Evangelos Venizelos, Pasok’s president between 2012-1015 and Simitis’s political successor as the leader of the right wing of the party.
Simitis, Pasok leader, and Greece’s prime minister between 1996-2004, was a moderniser and third way enthusiast, who secured Greece’s place in the euro. He won two successive elections, despite fierce criticism from the hard-left wing of the party for abandoning the traditional policies of the left. He also attempted to implement a radical reform of the national insurance system (the total deficit of which is the equivalent of 83 per cent of the total fiscal deficit for the 2006-2009 period and 94 per cent for the 2010-2013 period) but hit a wall of trade unions and opposition parties.
What happened to Pasok moderates after the endorsement and implementation of the bailout agreements of 2012? They suffered a major blow in the general election and the party was effectively split. Pasok’s leftwingers joined Syriza, some of them now holding key positions within Tsipras’ government. Greek moderates face a very familiar criticism: they are the ‘neoliberals’ who abandoned left ideology in favour of austerity policies that hit low income households hard. The widespread neologism to describe the Greek social democrats’ fate was ‘pasokification’. The word has a hashtag and an online definition: ‘reducing a country’s main social democratic party to the smallest party in parliament as a result of the rise of a more radical left party.’
Moderates and a few of Pasok’s soft-left managed to keep the title and the symbol of the party but lost their traditional electorate. They are now seeking to form a coalition between progressives in the model of the Social Democratic party where social democrats and the liberal centre could come together in order to restore the traditional relationship between the centre-left and the electorate.
Things are far from easy for them. In essence they need to form a new political party that will appeal to more than just its traditional voters.
However, New Democracy has now the advantage in this field. Its new leader, Kyriakos Mitsotakis is a liberal conservative who advocates policies that ease the cost of living on low and middle-income families, supports minority rights and believes in finding common ground between the progressive voices within the centre-right and social democracy.
New Democracy now occupies the centre ground of politics and capitalises on the economic achievements of Samaras’s government. These achievements, which brought the very first signs of a desperately wanted recovery, bear the stamp of moderate centre-left politicians but no centre-left politician is there to defend them. In a toxic environment, nobody is willing to take ownership of these achievements for the fear that they will be labelled as Tories. The field is wide open for New Democracy which appears to lead in all the polls.
This is a recipe for abandoning the centre ground and handing it over to the centre-right. A bitter lesson, not only for Greek, but for centre-left parties across Europe.