A Greek-educated political science professor at the University of Michigan predicts that Greece’s coalition government will have to relent to pressure from international lenders.
Writing in Foreign Affairs, George Tsebelis, who has written a book called Veto Players, about how political institutions work, said that Prime Minister and Radical Left SYRIZA leader Alexis Tsipras is outflanked by European Union leaders who have banded together against him.
He said that Tsipras and his array of ministers and people speaking for the party – who have been predicting a deal “any day now” with the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) – will have to back away from some of their anti-austerity campaign promises if Greece is to survive.
Greece was granted a four-month bailout extension on Feb. 20 on the promise to deliver a credible list of reforms as a condition of the troika releasing a 7.2-billion euro ($7.9 billion) installment, but has done almost nothing.
On-again, off-again talks have gone nowhere. “The leaks and conflicting daily statements from participants offer little clarity about the real state of affairs. Beneath them, though, lie structural issues that imply the EU has the upper hand. In the negotiating game, the deck is stacked in the EU’s favor,” Tsebelis wrote.
Tsipras’ big bargaining chip hope that Greece could be forced out of the Eurozone and weaken the financial bloc has fallen on deaf ears with the troika, with officials noting there are now more safeguards in place than in 2010 when the first of two bailouts of 240 billion euros ($266.77 billion) began.
“The EU’s substantive advantage is that it has control over liquidity. In all bargaining situations, the most impatient player has to make the most concessions. The Greek government points out that a failure in negotiations would be detrimental to the EU as well as to Greece. That might be true, but not over the same time frame,” he said, showing Greece’s underbelly.
Tsipras has drawn “red lines,” he said he won’t cross even to get more money, especially refusing to deliver more pension cuts and further weakening of worker rights, although word has come out that the government is likely ready to offer other concessions as the troika keeps playing hardball.
“The outcome of the negotiations will be a far cry from what SYRIZA promised in January,” when it won snap elections on the promise to reverse big pay cuts, tax hikes, slashed pensions and worker firings, he added.
If SYRIZA dissidents who want a Eurozone exit overrule Tsipras with their votes, Tsebelis said the Premier could call early elections and use a Constitutional tool to then pick his own party candidates to get more support for any compromise he’d be forced to make.
“The question is, does he want to strike a deal that will violate all (or most) of the principles he has advocated and the redlines he has drawn?” Tsebelis said, betting that he will.