Greek Prime Minister Alexis Tsirpas has resigned after he lost the support of many of his own MPs on the vote over the Greek bailout. He has chosen an election date of September 20, which means the opposition parties have very little time to prepare. With a faction of his own Syriza party breaking away, this is the best possible move and timing for Mr. Tsirpas. The election, however, may result in his defeat, but this offers him the best chance of a new mandate and solid majority.
Technically, Mr. Tsirpas’ resignation does not require an election to be held. The next biggest party, in this case the New Democracy Party, has three days to form a government. Then, the break-away faction of Syriza (calling themselves the Popular Unity Party), gets a chance, then the far right Golden Dawn. However, all parties may waive their right to negotiate, allowing the president to hold the election. Since none of the parties is likely to be able to form a government, the days of delay that not waiving negotiations will simply strengthen Mr. Tsirpas’ hand (relatively speaking).
The decision to go to the country now is nicely calculated. Mr. Tsirpas lost 25 members of his 149 MP bloc with the formation of the Popular Unity Party. His reversal on austerity rankles in many quarters. However, he remains popular (a recent poll has his approval rating at 61%), and the austerity effects of the deal have yet to bite. At the same time, the New Democracy Party is still in the middle of a leadership fight, and the Popular Unity Party has an entire electoral structure to build. If the voting goes ahead on September 20, Mr. Tsirpas has a good chance of winning. If he waits, his opponents will be better organized, and as his policies take effect, that 61% will fall.
The Popular Unity Party is likely to be crushed at the polls for two reasons. First, it lacks much in the way of electoral campaign structure. Some of the Syriza appartachiks will follow their MPs, but many won’t. New recruits, less experienced ones, are needed to fill the gaps. One month is probably insufficient. The second reason is a policy matter. The PUP’s leader, Panagiotis Lafazanis, argues that Greece would be better off leaving the euro and going back to the drachma. While economically an argument can be made for it (one remains unconvinced of its wisdom), politically, the idea is a loser. Most Greeks want to keep the euro, and all the suffering they have done over the last few years has been to stay in the eurozone. Leaving now would simply render all of that pointless, even if a drachma economy worked miracles. The Greeks will vote against the drachma this election.
The snap election has caught the nation’s European allies in a quandry. The German, Dutch, Austrian and other creditors don’t like Mr. Tsirpas very much. By the same token, New Democracy (which they favor) is hardly in a position to win without a leader chosen. The Popular Unity Party may have some support among those who want the Greeks out of the eurozone, but largely, they are worried about Greece becoming more obstreperous. The chair of the Eurogroup (the eurozone finance ministers), Jeroen Dijsselbloem, said “it’s crucial that Greece maintain its commitments to the eurozone.” Beyond that, he was saying nothing.
The one truly wild card here is the strange provision in the Greek constitution that gives the party that wins the most seats in parliament a bonus of 50 more seats. In other words, 250 seats will be filled on September 20 by the voters, and another 50 go to the party that does best. Syriza had 149 seats (including the bonus) in the outgoing parliament. New Democracy finished second with 76. Syriza’s 99 seats (excluding the bonus) would now be 74 with the departure of the Popular Unity group. If New Democracy can find a leader and engineer a competent campaign, the split in Syriza might allow New Democracy to sneak into office as main part of a coalition.
The timing is the best possible for Mr. Tsirpas, but re-election is far from guaranteed.