Alexis Tsipras

Guiding Greece through the financial crisis

The growing disenchantment with those austerity measures among Greeks led to frequent demonstrations. It was also reflected in the parliamentary elections of May 2012, in which Syriza (which captured about 17 percent of the vote) and a number of other smaller anti-austerity parties were the real winners, as the country’s two mainstream parties. New Democracy (ND) and the Panhellenic Socialist Movement (PASOK), garnered only about 19 percent and 13 percent of the vote, respectively, forcing a new election. In the subsequent election in June, Syriza finished just behind ND (27 percent to 30 percent), which formed a coalition government with PASOK and the Democratic Left party. Syriza was the winner of the May 2014 elections to the European Parliament, however (with 27 percent of the vote to 23 percent for second-place finisher ND). When Prime Minister Antonis Samaras of ND failed to win parliamentary approval for his presidential candidate in December, parliament was dissolved, and Tsipras led Syriza to victory in the snap election held in January 2015 (with about 36 percent of the vote to some 28 percent for ND). Having formed a coalition government with another smaller anti-austerity party, the Independent Greeks, Tsipras at age 40 became prime minister on January 26.

Almost immediately, Tsipras and his new minister of finance, Yanis Varoufakis—convinced that they were the vanguard of a broader European anti-austerity movement—went on a charm offensive to try to persuade other EU leaders to buy into a renegotiation of the bailout. While their casual open-shirt style was much commented upon, Tsipras and Varoufakis met with little support in other European capitals. By late February a somewhat chastened Tsipras had been forced into negotiating with the troika, rather than tossing out the deal made by the previous Greek government, though he insisted that he was doing so on his terms. Tsipras agreed to not roll back any of the measures that had been agreed to by his predecessor, and the troika pledged to extend the bailout for another four months. However, it refused to release the final tranche of €7.2 billion ($8.1 billion) until an agreement had been reached on reform measures. Principally at issue was the Greek refusal to implement policy changes regarding pensions, labour rules, and taxation that met with the troika’s approval.

As negotiations continued, Tsipras was criticized by elements of Syriza for wavering in his commitment to anti-austerity. Meanwhile, he downgraded Varoufakis’s role in the negotiations in response to foreign perceptions of the finance minister’s approach as overly combative. In May Greece barely managed to make its payments on the bailout loan (partly by culling funds from local governments), and negotiations with the troika took on renewed urgency as it appeared that the country might default on its June payments without an infusion of cash from the final bailout installment.

On June 26 Tsipras stunned the troika when he asked for an extension of the June 30 deadline for Greece’s latest loan payment and for the official end of the bailout so that a referendum could be held in Greece on July 5 on the terms of the bailout. On June 27 the finance ministers of the euro-zone countries refused to extend the deadline, and the next day the ECB announced that it would sanction no further increases in emergency funding for Greece’s banks. The Tsipras government responded by closing the country’s banks and limiting withdrawals from automatic teller machines to €60 until the referendum was held.

The June 30 deadline came and went, but not before Tsipras made an 11th-hour attempt to reach a settlement with the troika. In letters to Greece’s creditors, he accepted the bulk of the conditions that had been sticking points in the troika’s most recent attempt to reach agreement. Tsipras agreed to the troika’s conditions on most matters relating to taxes and pensions, but he still called for maintaining a discounted rate of sales tax (VAT) for the Greek islands and for keeping (though phasing out) special payments for the poorest pensioners. He also requested that the troika consider a new two-year loan of €29 billion ($32.2 billion), which would allow Greece to make its upcoming payments on the bailout. Response from spokespeople for the creditor institutions and countries was varied but generally cool, though doors to negotiations appeared to be open.

Much hinged on the outcome of the referendum. Casting it not as a vote on Greece’s continued participation in the euro zone (as some voters saw it) but as a mandate that would make it easier for him to negotiate better bailout terms, Tsipras called for Greeks to vote “no” on the referendum. More than 61 percent of them did. In the wake of the vote, Varoufakis resigned, a move that was seen as a conciliatory effort by the Greek government as it hoped to jump-start new talks.

In the meantime, Greek banks remained closed, as the threat of complete financial collapse loomed for the country. On July 8 Tsipras got a mixed reception from the European Parliament when he traveled to Strasbourg, France, to address that body. Far-right Euroskeptic nationalists and some leftists cheered him, but other members of the European Parliament lined up to castigate Tsipras and his country for its response to the debt crisis. He promised the assembly that Greece was ready to undertake the reforms that were necessary to secure another bailout but also stressed that a new deal needed to include debt relief. He returned to Athens having been granted by Greece’s creditors another opportunity to put together a proposal of reforms aimed at securing a new loan. On July 9 Tsipras submitted a detailed 13-page proposal of reforms (including a number of measures that had been rejected in the referendum vote) as part of a request for a new three-year €53.3 billion ($58.8 billion) bailout loan. After quick-turnaround meetings by the Eurogroup (the euro-zone finance ministers) and EU leaders, Tsipras was presented with a proposal for a new three-year €86 billion ($95 billion) bailout, which he presented to the Greek parliament. With the likelihood of financial collapse and “Grexit” (Greece’s exit from the euro zone) as the alternative, most Greek legislators joined Tsipras in viewing the draconian bailout agreement as the lesser of two evils and, in the early hours of July 16, 2015, voted to approve it. Thirty-two members of the Syriza-led coalition voted against the agreement (six abstained), but, thanks to the backing of the opposition PASOK and New Democracy parties, 229 members of the parliament voted for approval, opening the door to new negotiations.

Roughly a month later, on August 14, the final version of the new bailout agreement was passed by parliament in a lengthy session, but only after an even larger number of Tsipras’s Syriza comrades (nearly one-third) refused to support the prime minister—either voting against the agreement or abstaining. Given the desertion by members of his party, Tsipras contemplated calling a vote of confidence for his government. After the agreement had been ratified by the euro-zone ministers and the national assemblies of EU member countries (most notably by the German Bundestag), on August 20 Greece received the first tranche of the new bailout, €13 billion ($14.6 billion), which allowed it to make a pending €3.2 billion ($3.6 billion) repayment to the ECB. That night Tsipras appeared on television tendering his resignation and setting the stage for a snap parliamentary election in which he hoped to receive a new mandate from Greek voters. Under the Greek constitution, because of the shortness of the tenure of Tsipras’s government, that election could not be called until opposition parties had been given an opportunity to form a new government. Shortly after Tsipras’s resignation, more than two dozen parliamentary deputies on Syriza’s far left abandoned the party to form a new party called Popular Unity.

In the election held on September 20, Tsipras and Syriza surprised many observers not only by capturing the most votes but also by winning almost as many seats as the party had secured in its January victory. By finishing first with 35 percent of the vote, Syriza gained an additional 50 seats, bringing its representation in the 300-seat parliament to 145 seats. With the addition of the 10 seats won by the Independent Greeks, Syriza’s partner in its previous ruling coalition, Tsipras was poised to become prime minister again without the need of widening the coalition to include another party. Tsipras prepared to take office again committed to adhering to the terms of the bailout agreement but determined to attempt to win concessions regarding debt relief.

He also was faced with the problem of a growing crisis involving a huge wave of migrants and refugees who were seeking to escape turmoil in the Middle East and Africa by attempting to relocate to Europe. For many of them, the first stop on the journey to a hoped-for home in northern Europe was one of the Greek islands, which the migrants attempted to reach by making perilous boat trips from Turkey. The challenge of addressing this humanitarian crisis was mitigated somewhat for Greece and Tsipras in March 2016 after the EU and Turkey reached an accord under which Turkey agreed to accept the return of migrants who had reached Greece but failed to apply for asylum or whose requests were turned down. The number of migrants attempting to enter Greece from Turkey quickly dissipated; however, tens of thousands of migrants remained in Greece.