Greece’s negotiations with its creditors may finally come to a head this week. Last week Prime Minister Alexis Tsipras was presented with what creditors say is their best offer on revised terms for the bailout program, and Mr. Tsipras will soon meet with Germany’s Chancellor Angela Merkel and France’s President François Hollande. The hope is that Mr. Tsipras will face the reality that further concessions are unlikely to be forthcoming, and will accept somewhat lower targets for fiscal discipline in exchange for politically difficult pension reforms and other measures.
Mr. Tsipras may indeed be willing to strike such a bargain—for now. But no one should think that will be the end of the matter. Even if Greece’s governing Syriza party gives in to pressure and signs up for the demanded reforms, this doesn’t mean that they are going to be implemented.
The most likely outcome is that the reforms will be undermined by the ministers who are supposed to apply them. Then, after three or four months, the situation will once again reach crisis proportions, with Athens arguing that the program is not working and the creditors complaining that Syriza is not serious about implementing it.
That outcome would be an inevitable result of Syriza’s ideological commitments, about which Greece’s creditors have displayed a striking lack of understanding. The creditors seem to think that Syriza is just another eccentric left-wing party. They hope that, given time, patience and the right goading from European Commission President Jean-Claude Juncker, Syriza will eventually embrace free markets, globalization and competition. They expect another Luiz Inácio Lula da Silva—the former president of Brazil who abandoned extreme leftism in office and delivered strong economic growth.
What creditors miss is that Syriza is a special case. The party is fervent in its visceral hate of all the government attitudes and policies one usually associates with today’s open, knowledge-based economies. For Syriza activists, open markets are anathema, as are concepts like competitiveness, productivity and outsourcing.
Syriza’s two main economic convictions are an absolute dedication to the principle that government tax, borrow and spend policies are the best way to manage the economy, and an admiration of communist-style five-year plans and the principle that the economy must be actively commanded from the top.
These ideological commitments are at odds with the creditors’ bailout program, which aims to deregulate Greece’s red-tape-bound economy so that private-sector entrepreneurship can replace government as the primary generator of growth and job creation. That fact alone raises questions about whether a Syriza-led government would ever implement whatever reform program Mr. Tsipras might agree to this week. For Mr. Tsipras to liberalize Greek labor and product markets would be like Britain’s Prime Minister David Cameron introducing Soviet-style collectivization to British agriculture.
Creditors also misunderstand the intraparty dynamics within Syriza. A common view is that the party is split in two. On the one hand a good Syriza, represented by Mr. Tsipras, is supposedly capable of accepting and implementing a reform program. Meanwhile, a bad Syriza, represented by the Minister of Development Panagiotis Lafazanis, who leads the Left Platform, hews closely to the party’s far-left antireform roots. Some European politicians believe a reform program can succeed if they can convince Mr. Tsipras to get rid of the Left Platform and enter into a coalition with more sensible types like Stavros Theodorakis of the centrist party To Potami.
This is wishful thinking. One would be hard pressed to find a single instance where the two purported adversaries within Syriza disagreed on an ideological or political issue of any importance. In fact, it’s worth noting that Mr. Lafazanis was among those who endorsed the proposals Athens recently sent to its creditors, a sign that any “disagreements” within the coalition are merely theatrics.
Against all of today’s wishful thinking is the fact that significant reforms weren’t implemented even under the previous, purportedly pro-reform government of the center-right New Democracy party. They failed not for ideological reasons but because the clientelism and vested interests of Greek politics were so entrenched as to be hard to displace even when Prime Minister Antonis Samaras was committed to implementing the bailout program.
How then can Syriza be expected to muster the same commitment when it is deeply and openly hostile to even the slightest change in Greece’s statist economic tradition?
Creditors may feel they have no choice for now. They don’t want to push Greece out of the euro, as a default in the absence of a new deal probably would. But they also can’t demand that Syriza change its ideological beliefs any more than they could make such a demand of any other elected European government. For now they may prefer to pretend that Syriza will honor its signature and implement much-needed reforms. But no one should be under the illusion that this is anything but a chimera.
Mr. Michas is a political analyst for the website protagon.gr.
The original story by Takis Michas appeared in The Wall Street Journal here.
