• The new Prime Minister actually believes the economic nonsense that he spouted on his path to power. He now proclaims that "the troika belongs to the past." That is, the Eurozone must continue to hand over money to keep Greece afloat, but on terms dictated by Greece itself.

  • Just as Turkey's current government is paralyzing NATO policy, the new Greek government may begin to paralyze the ability of the European Council to adopt a common foreign policy.

The world is surprised and horrified by the result of the Greek general election. Readers of this website, however, will not be surprised. To quote from May 2014:

"One consequence of polyglossia is that most Europeans have little idea of what is happening in other EU countries than their own. For example, the Greek crisis has long disappeared from European headlines everywhere except in Greece, where it is in the headlines every day. Nor is it surprising, since this is the first Greek government in history to have seriously tackled the institutional problems that have plagued the modern Greek state ever since its inception in 1832."

So much for the good news of yesteryear. The bad news is that it may have been the last such Greek government.

The above excerpt was from Part Three. Part One spelled out in detail how the current Greek crisis is just the latest episode in those 180 years of Greek history. Back in 1843, for instance, the Greek state -- born in debt to banks in London and Paris -- was given an ultimatum by its creditors: cut your bloated bureaucracy or the next installment of your loan will be cancelled. In essence, the same scenario as the current Greek crisis. Greece faced bankruptcy again in 1893 and 1932, for example. The causes were always the same as in the latest crisis, which erupted in 2009: government overspending, excessive bureaucracy, over-generous terms of employment, miscellaneous corruption and massive tax evasion.

Part Two traced the course of the present crisis up to the previous general election (June 2012) and Part Three described the struggle of the government that just fell (within the context of the broader European political chaos.) Readers new to this intermittent drama, verging upon farce, can read the details there.

Both drama (Aeschylus) and farce (Menander), of course, were Greek inventions, along with political rhetoric (Pericles, Aristotle). Indeed, we are indebted to the Greeks for the invention of democracy. Yet they were never very good at it, say both ancient commentators (Thucydides, Plato) and modern ones. They performed perfectly only on the stage.

So let us recap merely what is essential for understanding the latest episode. After the restoration of democracy in 1974, power alternated between two parties, the center-right New Democracy [ND] and the Panhellenic Socialists [PASOK]. This was facilitated by a bonus of first 40, then 50, seats awarded to the party that polled highest in an election. The aim was to eliminate the need for a coalition government when (as generally) no party gained an absolute majority of the votes cast.

The last such government was formed in 2009, after PASOK, under George Papandreou, won the election with promises as absurd -- and euphoria as high -- as in the current victory of the far-left SYRIZA party of Alexis Tsipras. Papandreou's election slogan was "There's money!" (lefta uparxoun). That is, money to spend, hidden away somewhere, despite the mild austerity program of the outgoing ND government. He quickly discovered that there was far less money than even ND had claimed. To his credit, he negotiated the first bailout of Greece with other countries of the Eurozone. In Greek parlance, this and the later bailouts became known as "the memorandum" (to mnimonio).

When Papandreou presented the memorandum to the Greek parliament for ratification, ND opportunistically voted against it, hoping to profit from popular discontent. Instead, in the elections of May and June 2012, ND barely managed to gain the lead over SYRIZA, which sprang from almost nowhere into second place. PASOK almost vanished. Quite simply, the large self-deluding left-leaning fraction of the Greek population had switched allegiance from PASOK to SYRIZA. Indeed, including factions that had already split off from ND or from PASOK, a majority of votes went to anti-memorandum parties.

Only the 50-seat bonus enabled ND to form a government together with the remnant of PASOK. They negotiated further bailouts that were conditioned on constant surveillance of Greek government expenditure by a "troika" of officials appointed by the European Union [EU], the European Central Bank [ECB] and the International Monetary Fund [IMF]. In addition, the whole structure of public administration was to undergo the necessary reforms that every government had evaded since 1832. Representatives of the troika visited Athens periodically to hear reports and decide whether enough progress had been made to justify the next installment of the loans.

By objective standards, the reform plan has been salutary, despite the inevitable high cost to ordinary Greeks who were partly blameless, partly longtime participants in the traditional corruption and tax evasion. It is this progress toward a cure for the endemic Greek crisis that has been overthrown by the election of January 2015. The election, by the way, was provoked by another quirk of the Greek constitution. The President of the Republic plays a purely ceremonial role, but has to be elected by a majority of 60% of the parliament, which the government could not muster. The constitution mandates a general election in such cases.

With the 50-seat bonus, SYRIZA has fallen two seats short of a majority in parliament. But this far-left alliance has already agreed to form a coalition with a small right-wing anti-memorandum party, the Independent Hellenes, despite obvious disagreements on other issues. SYRIZA's Alexis Tsipras, consequently, has already been sworn in as Prime Minister of Greece.

Unlike Papandreou, the new Prime Minister actually believes the economic nonsense that he spouted on his path to power. He now proclaims that "the troika belongs to the past." That is, the Eurozone must continue to hand over money to keep Greece afloat, but on terms dictated by Greece itself. Otherwise, Greece can just default on the loans. He is also given to boasting that Germany's Angela Merkel has more to fear from him than he from her. If Greece left the Eurozone, he once claimed, German voters would punish her.

In reality, of course, the vast majority of Germans are thoroughly sick of spendthrift Greeks and it was principally Merkel who promoted the rescue of Greece from economic collapse. Nothing could endear Merkel to German voters more than kicking Greece out.

In their first reactions to SYRIZA's victory, the economic chiefs of the Eurozone have firmly insisted that the new Greek government must maintain all its memorandum commitments. The same message was sent to Tsipras by various heads of government.

SYRIZA's Alexis Tsipras gives an election victory speech in Athens, January 25, 2015.(Image source: RT video screenshot)

Tsipras had barely been sworn in when he had his first clash with his European counterparts. The European Council, consisting of the EU heads of state or government, together with its President and the President of the European Commission, issued a statement on January 27, expressing "concern" about Russia's role in the latest violence in the Ukraine. Tsipras quickly protested to Federica Mogherini, the EU High Representative for Foreign Affairs, that he had not approved the statement.

This was not merely a procedural objection: Tsipras is a longtime critic of European policy on the Ukrainian crisis. In February 2014, he denounced the EU's policy of imposing sanctions, and in May 2014, during a visit to Russia, he claimed that the EU wants obedient governments in Greece and the Ukraine alike.

Just as Turkey's current government is paralyzing NATO policy, the new Greek government may begin to paralyze the ability of the European Council to adopt a common foreign policy. Another potential area of conflict is European policy on the Middle East, since SYRIZA is known for its vociferous support for the Palestinians against Israel.

What, then, of the future? Two basic facts may determine it.

First, the new Greek government can hardly pay the salaries of state employees without further installments of foreign money under the bailout plans. All the more so, if the numbers of those employees swell as Tsipras implements his promises to reverse reforms -- promises that propelled him to victory.

Second, the Eurozone cannot tolerate SYRIZA-like developments among its other weaker members. The Eurozone contains, on the one hand, countries that are solvent because they practiced painful financial responsibility (Germany, the Netherlands, Austria, Estonia). And, on the other hand, it contains countries that indulged themselves and had to draw assistance from the former group (Ireland, Portugal, Spain, Italy), conditional upon to their own "memoranda." France, moreover, is slipping toward the second group.

So three scenarios can be envisaged. One is that the rest of the Eurozone bludgeons the new Greek government into following the path of its predecessor. Not a likely prospect, given the obtuseness of Tsipras and his allies. The second scenario is that Greece is ejected from the Eurozone and has to reintroduce its own distinct currency. That will be a messy process, but the Eurozone can survive because Greece is a minor member (3% by population). The Greeks will suffer most.

The third scenario is that Greece is allowed to resume its old misbehavior, which gradually infects other ailing Eurozone states. Then it will be rather the economically healthy states that are impelled to leave, maybe starting with the Netherlands. It would make much sense for Germany, Austria and the Netherlands to form a continuous area with its own hard currency, which a few smaller states would also adopt formally or informally.

At this stage, it would be foolhardy to predict which of these scenarios will be realized. Part Four of the perennial Greek drama has barely begun.

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