The new Syriza-led government in Greece and its alliance struggles in the EU

by Davide Covelli

Picture from http://www.cgw.gr/

On 26 January 2015 Alexis Tsipras, leader of the major anti-austerity party coalition in Greece, assumed the lead of the Greek government. With his manifesto he sought to refuse explicitly and totally the general principles on which the entire political economy of the EU has been based until now. Tsipras’s victory speech, stating “the verdict of the Greek people annuls today in an indisputable fashion the bailout agreements of austerity and disaster”, provoked the German finance minister Wolfgang Schäuble to immediately reply, highlighting that “there's no question of a debt haircut”. What clearly looms from this exchange of words is that there is an internal struggle within the EU,  exposing both ideological and national interests.

The European institutions are designed on the principle of balancing the different member states. The struggle for power in the EU has always been based on a concerted form of agenda setting and on a definition of the role of member states within a common institutional and normative framework. This framework is an achievement that was reached through the endorsement of multilateral treaties.

These treaties ought to be respected by the states that signed and ratified them. Thus, even though defecting from the European treaties is not impossible and even though there is no clear or explicit exit option procedure, it is generally considered infeasible that member states do not comply with the institutional framework and normative requirements to which they agreed. What usually happens in this situation, as in any multilateral treaty-based organization, especially when constituted by supranational bodies, is a the emergence of firm and strong reactions against any free-riding attempt.

However, the intervening variable of the global economic crisis is something that challenged the internal balance and institutional stability of the EU even more. The crisis strengthened the ties among its member states and warranted the need for action constrained by time and efficacy. Despite the initial optimism and the financial resources bestowed upon member states through EU membership, the austerity policies have shown to have a negative impact on some European economies. Indeed, the victory of the Syriza-led coalition in Greece illustrates this situation.

Instead of solving this cleavage inside a supranational body of the EU, thus reaffirming the unity of the European project, the clash between supporters and critics of austerity has been brought to the bargaining level between member states, hindering the compliance required by a multilateral treaty. In fact, this impasse is faced through a system of alliances, where balancing and bandwagoning behavior can create different outcomes. We can now see a shift in EU core decision-making from mostly supranational institutions, such as the ECB, to intergovernmental bodies, such as the European Council and the ECOFIN.

Various actors play a key role in polarizing the debate. Most of the European member states have explicitly aligned themselves with the German approach of forcing Greece to comply with the austerity milestones. However, some Southern European states present themselves as potential Greek allies (Italy with Renzi and Spain with a hypothetical victory of Podemos), something that will determine whether Tsipras’s promises will remain on the purely rhetorical level or not. What is certain, is that for Greece to put in place concrete policies without being forced to exit the EU, Syriza will have to reassure its partners (parties and states) of its willingness to find a compromise. Tsipras’s ability to create balancing or bandwagoning alliances with the other states might decide the entity of change in the general principles of the European economic policy.