Syriza, Greece’s ruling party, is headed for electoral defeat

FOR A MAN facing imminent electoral extinction Alexis Tsipras, the 44-year-old prime minister of Greece, seems as untroubled as Socrates preparing to drink his hemlock. For a start, he affects not to believe the polls. Even though all 12 of those published since the start of the year show his party, Syriza, losing to its rival, New Democracy (ND), nine of them by double-digit margins, he thinks they are systematically wrong. “They have a bad record,” he says. “At the time of the referendum [on a third bail-out, which he opposed], they predicted a close result. In fact, we won 61.3%.”

That is true, but if Mr Tsipras really thinks he is in with a shot, he is alone among observers. Greece’s next general election must take place by October (though many expect him to call a snap vote at the same time as the European Parliament election, on May 26th), and in an interview with The Economist he seemed more like a man focused on his legacy than on the future. It is, to be fair, not a bad one.

Though the world did not end on January 25th 2015, you might have been forgiven for thinking that it was about to. The election that day of a new Greek government under Syriza, the Coalition of the Radical Left, sent shock waves around Europe. Marine Le Pen, the French nationalist leader, hailed it as a “massive blow” to the EU; ratings agencies spoke of downgrades; Angela Merkel warned darkly that Greece needed to stick to its commitments on austerity and reform. She was right to worry. Over the next six months, the Syriza government broke off talks on a new bail-out, called its referendum on the terms demanded by the EU (which its finance minister had described as “fiscal waterboarding”), campaigned for a “No” vote, and won handsomely.

Since the referendum, though, Mr Tsipras has performed the most remarkable volte-face in recent European history. His Germany-defying finance minister, Yanis Varoufakis, was pushed out; the bail-out terms he had contemptuously rejected were accepted; and the last phase of the austerity programme was fully implemented. Growth has returned, if a little anaemically, to 1.9% last year, and the government has more than met its Brussels-imposed obligation to run a primary (ie, excluding debt payment) surplus of 3.5%. Unemployment has fallen from 28% to (a still-too-high) 18%. “We have now had two years of 2% growth. This is very important given that we are also running a [primary] surplus above 3.5%....We had to fight to prove we could do it, and in less than two years we did it,” the prime minister says.

Credibility matters to Mr Tsipras, for his party and for Greece itself. He insists he intends to see his term through, as a way of proving that Greece has recovered from the chaos it was cast into by the 2008 financial crisis. As the country’s GDP crashed by 25%, Greece saw five general elections between 2009 and 2015. “I will not hold an early election, because I want to show that this is a country of normality. For me, the most significant achievement is that we are back in a normal condition,” he says. In place of unstable coalitions, he continues, Greece now has “a clear division between progressives and conservatives…we have showed that Syriza is a party of compromise, and that Syriza is the leader of the centre-left. We are a party that belongs to the European family of the governing left. And if you govern, you have to make compromises.”

The apparent evolution of Syriza from radical- to centre-left does not convince everyone. Critics include some very highly placed people, who are disquietingly nervous of criticising the government publicly. “Fundamentally, this is a party that remains uninterested in encouraging investment,” says one senior banker. Most of the fiscal adjustment under Syriza has been in the form of higher taxes on middle-class Greeks, rather than cutting spending or new privatisation.

Although tax collection has been improved, little has been done by Syriza to boost Greek productivity. This betokens problems to come. “For the moment, there is still surplus capacity in the economy, but soon we will require a lot more investment if we are to grow,” says the banker. But with Greek banks sitting on non-performing loans of around 45% of their books, Greece’s dismal investment rate will not shift much. Foreign direct investment could plug the gap; but the Syriza government has a bad record on that score. Parts of a huge Chinese investment at Piraeus, Athens’s port, are being stymied by bureaucratic objections. The fact that a development on the site of Athens’s old airport seems paralysed is also a big eroder of confidence. Lawyers criticise a newly-politicised judiciary.

The party’s attitude to education comes in for particular stick from the Syriza-doubters. Small things, like the ending of a tradition where the best-performing student at schools gets to carry the Greek flag in parades on national days are a sign, they complain, that Syriza is opposed to meritocracy and still wedded to its far-left past. Worse offences include the reversing of a law designed to loosen the often-disastrous grip of politicised student representatives on the governing councils of universities. Syriza’s hostility to the market is evidenced, says one leading industrialist, by the fact that Greece is the only country in the world apart from Cuba not to allow privately owned universities. Foreign universities interested in offering courses in Greece find it virtually impossible thanks to renewed bureaucratic interference.

If Mr Tsipras’s days look to be numbered, what of the man likely to replace him later this year? Kyriakos Mitsotakis, the leader of New Democracy, is the polar opposite of the charismatic prime minister. Geeky and soft-spoken where Mr Tsipras is confident and forceful, Mr Mitsotakis could be a hard sell to ordinary Greeks. A graduate of Harvard Business School and the son of a former prime minister, he might have been sketched by a caricaturist to typify the Athens elite.

Voters seem unfazed by that. Mr Mitsotakis’s real problems may come after victory: from his own party which, as Mr Tsipras did with Syriza, he will need to change. Many Greeks blame ND for the crony capitalism and reluctance to pay tax that got the country into its mess in the first place. Still deeply conservative, ND tried to prevent Mr Tsipras from allowing gay couples to foster children. It also tried and failed to stop him recognising Greece’s northern neighbour under the compromise name of North Macedonia, a deal that has ended a nasty dispute that has been going on for the past 27 years. Mr Mitsotakis caved in to his party’s right wing on both issues.

But it would be a mistake to underestimate him. He has transformed the party’s finances, moving to headquarters costing a tenth as much. In an earlier government he did well as minister for administrative reform. “Tsipras has performed very poorly, for instance compared with Portugal, which has recovered much further and faster than Greece,” he says. His first priority will be tax reform, especially to ease the burden on business. He will push on with privatisation, and seek a less austere agreement with Greece’s creditors. “I inherited a party in deep crisis, and I’ve turned it around,” says the challenger. Now, he reckons, he can do the same for Greece.