Rib and Sea

By Hugo Dixon. (This article was originally published by Reuters.).

The upcoming Greek election may reopen the can of worms that the country’s recent 86-billion-euro bailout deal with its creditors was supposed to close. Given that no party is likely to emerge from the Sept. 20 vote with a majority, it may be hard to form a strong government that can implement the program. There’s even a risk that there will be yet more elections, tipping Greece back into crisis.

When Alexis Tsipras triggered the election by resigning as prime minister, he probably thought he would win fairly easily. After all, July’s opinion polls showed him head and shoulders above his opponents. Tsipras’ idea was to get rid of the parliamentarians in his left-wing Syriza party who opposed his deal with the eurozone and secure a new mandate to implement the program. But new opinion polls that came out last week paint a different picture.

In all, Syriza is still the leading party. But its gap over the center-right New Democracy party has narrowed sharply. What’s more, Tsipras’ own approval rating, which used to be sky high, has come down to earth. In a poll by the University of Macedonia, only 30 percent of those asked had a positive view of him, down from 70 percent in March. In the past, Tsipras seemed like a Teflon prime minister, who remained popular despite terrible decisions that took the country to the edge of an economic abyss. But now it looks the mud is beginning to stick.

The civil war inside Syriza is also taking its toll. One hard-left faction, which wants to bring back the drachma and is furious that Tsipras agreed a deal with the eurozone despite previously saying he wouldn’t, has already created a new party. The election campaign has barely started and opinion polls during the August holiday season are not considered particularly reliable.

Despite those caveats, it doesn’t look likely that any party will emerge with a majority in the 300-seat parliament even after taking account of the fact that the one with the most votes gets an extra 50 members of parliament. This presents a problem. True, the vast majority of MPs elected next month are likely to belong to parties that are committed at least in theory to the bailout. The snag is that Tsipras has said he won’t be prime minister of a government including New Democracy or two smaller centrist and center-left parties.

What’s more, it is touch and go whether his favorite coalition partner, the far-right Independent Greeks, will secure any MPs at all. If Tsipras can’t form a government, there may have to be yet more elections, the third this year. This could cause further economic mayhem because Athens would fall seriously behind in implementing its bailout deal. People might even speculate again that Greece could leave the euro. The Greek people might well punish Tsipras if he forced a third election. They already seem unhappy that a second ballot has been called - not to mention that Tsipras held a referendum in July on an earlier version of the bailout program.

Given that, Tsipras might yet form a coalition with the center and center-left parties he has pledged not to deal with. The former prime minister does, after all, have a track record of going back on his word. Such an outcome might lead to an effective implementation of the bailout. But there is a risk that Tsipras won’t get rid of all the rebels from his party because he is afraid of swelling the ranks of the new splinter group. In that case, he could find his government starts with a majority, but that its unity melts away when it has to take tough decisions, again triggering elections.

This scenario might be avoided if any party invited to join a Tsipras-led coalition insisted on all the other centrist parties being in the government too. This would probably give it a big enough majority to withstand future defections. Any putative coalition partner should also insist that Tsipras appoints serious ministers including some technocrats to his cabinet. His first government was plagued with incompetence. Another idea is that Tsipras could support some form of national unity government but not as its prime minister. He could propose another Syriza politician or some technocrat for the post. But this would raise the concern that Tsipras wants to wash his hands of the program he previously signed up to, which in turn would make it hard to implement.

All these calculations would, of course, change if New Democracy wins the election. It would find it easier to form a coalition because it has promised to work with any democratic party after the vote. It has even said it would work with Syriza in what would be a national unity government. While that, indeed, might be the best outcome for Greece, Tsipras is most unlikely to agree to it. Even if the worst scenarios are avoided, the risk is that amid the political fighting, what’s most beneficial for the Greekpeople does not end up driving events forward.