Thursday, July 2, 2015

Greek Referendum Plan by Alexis Tsipras Tests His Power and Conviction

ATHENS — As Friday night became Saturday morning, with sidewalk cafes still bustling in central Athens, Prime Minister Alexis Tsipras abruptly appeared on national television.
Mr. Tsipras, only 40, had spent his five months in office locked in increasingly acrimonious negotiations with Greece’s creditors. Belittled by critics, and facing the prospect of default, he was under intense pressure to sign a deal.
Instead, Mr. Tsipras tossed a grenade.
With much of Europe sound asleep, Mr. Tsipras stared into the camera and shattered the careful decorum of European Union diplomacy. Declaring that creditors were demanding “strict and humiliating austerity,” Mr. Tsipras announced a national referendum on July 5, so voters could decide for themselves.

“We should respond to authoritarianism and harsh austerity with democracy, calmly and decisively,” Mr. Tsipras said. “Greece, the birthplace of democracy, should send a resounding democratic message to the European and global community.”

Stunned, his fellow European leaders shut down negotiations, capped the lifeline they had been providing Greece’s banks, angrily denounced him as irresponsible and dishonest with his own people, and not so subtly suggested that Greece needed a new government if it wanted to continue drawing economic help.

Now, with the Greek crisis posing a threat to the global economy, the sniping started dissipating somewhat on Monday, even as Greece was left coping with a shuttered banking system and new uncertainties about its future. But from Berlin to Brussels to Washington to Athens, the same question permeated discussions about Greece: What kind of game is Mr. Tsipras playing?
To some critics, Mr. Tsipras turned to the referendum as a last-ditch play to retain power by stoking a nationalistic response to Greece’s standoff with its creditors. To others, he was a study in ideological conviction, admired by some of his supporters but scoffed at by others, who predicted potentially disastrous consequences for his own people.
But there was also a case to be made that, by accident or design, he had actually succeeded in intensifying the crisis in a way that could provide him with additional leverage should negotiations get back on track, as the United States and some European leaders urged on Monday.
Whether that is possible, given the mistrust on both sides, remains to be seen. For now, Mr. Tsipras’s tactic remains, if nothing else, an audacious maneuver, defining him as a rare unpredictable force among European Union leaders, while also focusing new attention on Europe’s austerity policies and highlighting the failings in the long-running Greece negotiations.
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Greeks Rally Against Austerity Rules

Thousands of anti-austerity demonstrators gathered outside the Parliament building in Athens to show their support to the Greek government in its negotiations with international creditors.
By Associated Press on Publish Date June 29, 2015. Photo by Milos Bicanski/Getty Images.
“That’s really the tragedy of all this,” said Nick Malkoutzis, a political analyst in Athens, pointing out the shortcomings among all negotiators. “There has been a massive, collective failure.”
Barely five months ago, Mr. Tsipras stood in front of Athens University before thousands of cheering supporters, newly elected as prime minister, as he vowed to remake the European political order. He was the youthful, handsome leader of Greece’s radical left Syriza party, having ridden waves of populist rage against the policies of economic austerity demanded by creditors in exchange for bailing out the country with 240 billion euros in loans, after the European economic crisis.
In just a few years, Syriza had risen from the fringes to shatter Greece’s decades-old political establishment. Leftists across Europe rejoiced and predicted an electoral backlash against austerity in Spain and elsewhere. Mr. Tsipras interpreted Syriza’s election victory as a democratic mandate to roll back austerity and negotiate new terms to the country’s bailout.
“He had delusions about how the European creditors would treat him,” said Stavros Lygeros, a political commentator in Athens, with ties to Mr. Tsipras. “He thought they would respect the Greek vote and try to reach a mutually beneficial agreement.”
Any honeymoon with Europe was short-lived. Greece’s outspoken finance minister, Yanis Varoufakis, alienated many European officials. The new Syriza government’s objective was a comprehensive new agreement, including debt relief, and the flexibility to run the economy as the government saw fit. The creditors — the 18 other eurozone countries, the European Central Bank and the International Monetary Fund — blanched.
The compromise was an interim agreement on Feb. 20 that extended the bailout program until June 30. Mr. Varoufakis and other Syriza officials described the agreement’s language as “creative ambiguity,” suggesting that it gave the government license to begin putting its own policies into effect. But creditors had included a poison pill, withholding a delayed loan of 7.2 billion euros, or about $8.1 billion, in the bailout program. Unlocking that money became the focus of negotiations going forward, especially as Greece was rapidly going broke and staring at debt payments on the horizon.
In Brussels, technocratic negotiations stalled, as European officials blamed the Greeks for not presenting serious proposals.
By late April, Mr. Tsipras stepped in. As a high school student, Mr. Tsipras had been a leader in a nationwide sit-in movement against cutbacks in free books and housing. In college, he was involved in negotiating with administrators on behalf of other students. Even then, Mr. Tsipras was unflappable, contemporaries recalled.
“We were embarrassed,” said Andreas Karitzis, laughing, a college friend during that era who is now a member of Syriza’s central committee. “He was so polite and diplomatic. We were young and our blood was boiling.”
But, he added, Mr. Tsipras’s equanimity should not be confused with obeisance or lack of fervor. What separated him from others was his coolness under pressure, Mr. Karitzis said. “He is a guy who has cold blood,” he said, meaning that Mr. Tsipras is someone who does not panic. “He doesn’t tremble. He is able to handle it, putting aside the emotional side, the fear.”
Prime Minister Alexis Tsipras of Greece acknowledged cheers by some Parliament members in Athens on Saturday. Credit European Pressphoto Agency
European leaders and negotiators in Brussels bore their own pressures, as they faced voter anger over shipping billions of euros in loans to Greece. As Mr. Tsipras made regular trips to Brussels, rumors circulated that European officials saw him as a moderate and hoped he might shed some of the more radical elements of Syriza and form a new governing coalition with more centrist parties.

“Cutting a bad deal is not an option for him,” said one senior Syriza government official last week, speaking only on condition of anonymity. “One problem with the negotiations was that their negotiators read him wrong. They thought he was willing to do whatever that was needed to stay in power.”
For weeks, speculation has circulated in Athens that the mounting pressure might have taken a toll on Mr. Tsipras’s health, including talk of anxiety attacks. The senior government officials scoffed at such an idea but noted that Mr. Tsipras has long had high blood pressure. On one or two occasions in recent weeks, a doctor has come to check his pressure.
“He was feeling dizzy, and very tired,” the senior official said, adding that he had been placed on a healthier diet and is fine.
Even with his outsized place inside Syriza, Mr. Tsipras has long been criticized for failing to discipline the more radical members in his coalition, which is more anti-euro than the Greek public at large. Many Syriza members are loath to sign any agreement that would break their strict anti-austerity election pledge and believe European leaders are trying to force them to succumb to break them politically.

“What they want is to engulf the left wing in these policies,” said Despoina Charalampidou, a Syriza lawmaker. “This is something we will not allow.”
But on June 21, Mr. Tsipras seemed to finally push past recalcitrant members of his party and propose a new deal. He forwarded a proposal that included pensions changes, increases in value-added taxes and other measures intended to raise revenues.
In Brussels, creditors were pleased and suggested that the basis of a deal might finally be at hand.
But then the creditors sent a counterproposal, with red ink indicating changes, including pension cuts and more taxes.
“When the Greek government got this, they were horrified,” said Mr. Malkoutzis, the political consultant. “It quickly became apparent to Tsipras that he had little chance of convincing his party to support this.”
Some analysts speculate that Mr. Tsipras called the referendum to save his party, since putting the matter to voters absolves Syriza of its campaign promise not to sign such a deal. Others argue that the prime minister, like others in Syriza, are actually trying to steer Greece out of the eurozone. Mr. Lygeros, the political commentator who has known the prime minister for years, is critical of how he has handled the negotiations. But in an interview conducted last week, when it looked as if the Greek side would relent to creditor demands, Mr. Lygeros also noted that Mr. Tsipras could be pushed only so far.
“For better or worse, the things he was saying when he got elected were things he genuinely believed in,” Mr. Lygeros said. “If he is cornered too tightly, he is unpredictable. He might even go to a referendum.”
Two days later, Mr. Tsipras did just that.

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