Frustrated officials want Greek premier to ditch Syriza far left

Peter Spiegel in Brussels and Kerin Hope in Athens
Financial Times
April 5 2015

Eurozone authorities’ frustration with Greece has grown so intense that a change in the current Athens government’s make-up, however far-fetched, has become a frequent topic of conversation on the sidelines of bailout talks. 

Many officials — up to and including some eurozone finance ministers — have suggested privately that only a decision by Alexis Tsipras, Greek prime minister, to jettison the far left of his governing Syriza party can make a bailout agreement possible. 

The idea would be for Mr Tsipras to forge a new coalition with Greece’s traditional centre-left party, the beleaguered Pasok, and To Potami (The River), a new centre-left party that fought its first general election in January.

“Tsipras has to decide whether he wants to be prime minister or the leader of Syriza,” said one European official. 

A senior official in a eurozone finance ministry added: “This government cannot survive.”

Members of Syriza’s moderate wing admit there is a problem with the Left Platform, the official internal opposition that represents about a third of the party and controls enough MPs to bring down the government if it were to rebel in a parliamentary vote.

“We used to be more debating society than political party . . . so it is hard to get a system of party discipline up and running,” said one Syriza official. “But you have to remember — we’ve been in power less than 100 days.”

Under the leadership of Panayotis Lafazanis, almost as popular a figure in the party as the prime minister, Left Platform members say they will veto structural reforms that are being pushed hard by Greece’s creditors in the current round of bailout talks.

Yet even though Mr Tsipras had adopted a more moderate stance in his dealings with Brussels and Berlin, it is too soon to expect him to risk an open clash with his left wing, according to observers in Athens.

To win the support of Pasok and To Potami, Mr Tsipras would also have to dump his right-of-centre coalition partner, the nationalist Independent Greeks.

“It would be desirable to move to a more coherent pro-European centre-left coalition compared with this unseemly union of the radical left with the populist right,” said George Pagoulatos, a professor of political economy at Athens business university. “But it is premature for the moment.”

Eurozone officials insist they are not trying to force a change in the government — sensitive to accusations the EU was complicit in ending the tenure of George Papandreou, Greece’s prime minister at the start of the eurozone crisis, and Silvio Berlusconi, the Italian premier until late 2011.

Tsipras has to decide whether he wants to be prime minister or the leader of Syriza
- European official
But they also admit exasperation with Mr Tsipras’s failure to choose between the Left Platform’s demands for a complete rejection of the bailout programme and a more pragmatic approach that would include an outreach to more centrist potential allies in parliament.

In Athens, Mr Tsipras is seen as still unwilling to reveal his moderate side.

“The signals he gives are confusing, but some actions point towards a major shift in policy,” said Aris Hatzis, an associate professor of law and economics and legal theory at the University of Athens. “There is one narrative at home and another more co-operative one when he goes abroad.” 

Obstacles remain to any joining up with Pasok and To Potami. Pasok is seen by the majority of Syriza supporters as part of the corrupt old political system that brought down the Greek economy and then failed to implement reforms agreed with the EU and International Monetary Fund.

Moreover, the party is in turmoil after a poor showing at the January election, and a new leadership may not emerge for several months. 

Stavros Theodorakis, leader of To Potami, has said he is willing to team up with the Syriza government, but only if Mr Tsipras agrees to sit down and negotiate a joint programme. 

Eurozone frustration has spilt over into relations with Yanis Varoufakis, Greece’s charismatic finance minister who is viewed as lukewarm towards the country’s future in the eurozone. 

European officials argue that he is frequently condescending and lecturing to his eurozone counterparts in meetings — a tendency that has alienated even potential allies. 

With the bailout talks moving at a snail’s pace and a cash crunch looming, Mr Varoufakis flew to Washington on Sunday for a meeting with Christine Lagarde, IMF managing director.

Mr Varoufakis requested the meeting partly to reassure Ms Lagarde that Greece would be able to repay a €450m loan tranche, due this week, despite a liquidity squeeze, but also to send a message that he is still in charge of the bailout talks.

Efforts to sideline Mr Varoufakis have occasionally burst into public. Michael Noonan, the Irish finance minister, suggested last month that bailout negotiations were being taken away from Mr Varoufakis’s finance ministry and handed over to Yannis Dragasakis, the deputy prime minister, who some see as more pragmatic.

Despite Mr Tsipras’s continued domestic popularity, Greek opposition figures argue that backing will fade as Syriza continues to make concessions to eurozone authorities and the cash squeeze worsens. One opposition leader predicted voter sentiment would shift in a month or two. 

Others are less sure. One person briefed on the EU’s negotiating stance said concern was rising in Brussels that if the continued stalemate forced Greece to impose capital controls to prevent a bank run, this could strengthen Syriza’s populist appeal rather than sparking disillusionment among voters.