Rising Greek Political Star, Foe of Austerity, Puts Europe on Edge

From The New York Times:

At 37, and looking not a bit his years, Alexis Tsipras is clearly enjoying his moment. He vaulted to prominence less than two weeks ago, when his previously obscure left-wing party placed second in national elections with the promise of repudiating the loan agreement Greece’s previous leaders signed in February.

Since then, he has engaged in a high-stakes game of chicken with Europe’s leaders. While they have scrambled to put together contingency plans in case Greece exits the euro zone, Mr. Tsipras has calmly stated his case and let the rest of Europe sweat about the possibly disastrous ramifications if it does.

“It’s true,” he said Friday, with a smile and a glint in his eye, during an interview in his small office in the Greek Parliament. “I like to play poker.”

While Mr. Tsipras clearly has much of Europe on the run, he hardly seems to be breaking a sweat. “Our goal isn’t to blackmail or to terrorize, our goal is to shake them,” Mr. Tsipras said coolly of the foreign lenders whose austerity-for-loans deal he wants upended.

“We want to convince them,” he said. “They need to change the policies in Greece and change the policies in Europe, otherwise Europe will be at very large risk.”

In Mr. Tsipras’s view — which neatly dovetails with the rising anti-austerity tide across Europe — Greece’s problem is a European problem that needs a European solution. He insisted that he wants Greece to stay in the euro, just not under the terms of its current bailout. “The euro zone is a chain with 17 links,” he said, referring to its members. “Greece is one of these links. If one of these links breaks, the link is destroyed, but the chain falls apart, too.”

Poker references aside, Mr. Tsipras insisted that it was really the financial markets driving much of the crisis, not him or Greece.

“They don’t have any moral scruples, and if they push Greece out, they’ll just move on to the next country,” he said. The next countries in the firing line, he added, happen to be Italy and Spain — both too big to fail.

While other political parties in Greece are now also calling to renegotiate the loan deal, it is Mr. Tsipras, an untested leftist who could well become Greece’s next prime minister in elections on June 17, who has positioned himself in a showdown with Greece’s lenders.

In the interview, he said he would not veer from pledges to repudiate terms of Greece’s bailout that forced wrenching hardship on average Greeks, a stance that may lead Greece’s lenders to withhold further aid and set off a default.

But as far as he is concerned, negotiations over Greece’s debt deal “have already begun,” he said, largely because European leaders are already showing signs of being more lenient on austerity. “The red lines from before no longer apply,” he said.

But while Mr. Tsipras has sometimes been portrayed in the European news media as a wild-eyed radical — he even seems at times to delight in that caricature — he is a cool strategist playing a game of brinkmanship with the rest of Europe, and particularly Chancellor Angela Merkel of Germany. In the past, German and other European leaders have made last-minute maneuvers to keep Greece in the euro, precisely because of fears that an exit would carry too high a cost, from bank collapses across Europe to destabilization of the global financial system.

Mr. Tsipras seems to be betting that they will blink again, but whether they will is far from clear.

Simon Tilford, chief economist at the Center for European Reform in London, said, “The Europeans may blink, but this time they might not blink enough.” He said that European leaders might propose a “mini-Marshall Plan” to stoke growth in Greece, but that what was needed were political changes to promote closer bonds among euro zone countries. “People are fed up,” Mr. Tilford added. “They would prefer that Greece stay within the euro zone, but they won’t take the political steps to make Greek membership sustainable.”

Indeed, on Friday, Ms. Merkel may have upped the ante even further, suggesting to the Greek president, Karolos Papoulias, that Greece ponder holding a referendum, in parallel with general elections in June, so Greek voters are clear what is at stake, the Greek government spokesman said. (Though a Merkel spokesman denied the remark, Mr. Tsipras released a statement later Friday accusing Ms. Merkel of treating Greece like a “protectorate.”)

In some ways, Mr. Tsipras’s arguments are not so different from those of some of the leaders gathered at the Group of 8 summit at Camp David on Friday. As growth has slowed, an anti-austerity backlash has swept Europe, forcing Ms. Merkel to soften her stance. Leaders, especially President François Hollande of France, were expected to press Ms. Merkel at the meeting to give Europe more breathing room for growth.

Mr. Tsipras agreed. “The message we’re giving to the G-8 is that we have to press Mrs. Merkel to follow the example of America, where the debt crisis wasn’t tackled with austerity measures but with an expansionist approach,” he said.

He added that Europe needed a more federal system, like the United States. He likened Greece to debt-ridden California, only that the United States would never allow California to exit, and has the federal structures to keep the union together.

Mr. Tsipras’s strategy of calling Europe’s bluff has been a winner at home as well. Some polls place his Syriza party first and others second in the campaigning for a second round of elections, which were called after he and other political leaders failed to form a government after May 6 elections.

An engineer by training, Mr. Tsipras said he had also studied economics and learned in the trenches with his “comrades” on the economic committee of Synaspismos, a proto-Communist strain within Syriza in which he came of age.

Lean, affable, yet somewhat inscrutable, Mr. Tsipras says he does not like wearing ties because they remind him of his days in the navy, where he did his mandatory military service. In recent speeches, he has said that the “terrorists” in suits and ties who are deciding Greece’s fate are worse than the anarchists in hoods. Some compare him to Andreas Papandreou, the founder of the Socialist Party and a gifted populist.

Mr. Tsipras may be riding the tide of anti-austerity, but it remains to be seen if he has what it takes to steer the ship. Pressed to present an alternative to the current loan agreement — or his plans for restoring Greece to growth while keeping it in the euro zone — he offered few, if any, specifics.

His party seeks a three-year suspension of loan payments until the Greek economy can recover, a reversal of the terms of the loan agreement that call for slashing wages, scaling back public employees and undoing collective bargaining agreements. It has also called for nationalizing banks in order to control their lending policies as part of a recapitalization now under way as part of the debt deal.

Critics say that under the guise of change, Syriza may offer little more than the status quo — or more state control in a country with a dysfunctional state. Indeed, business owners are particularly worried that Syriza’s plans for more state control would stifle growth further, transforming Greece into a kind of Bulgaria.

Mr. Tsipras said: “The healthy businesses here have nothing to fear from a government that’s going to try to stop this poison. Healthy businesses understand that austerity curbs consumption.”

Although he conceded that the Greek state had “significant dysfunctionalities and a need for deep structural changes,” he did not offer specifics beyond faulting the Socialists and center-right New Democracy for building up a jobs-for-votes system that helped Greece’s public debt balloon.

Instead, he kept repeating the mantra that he hoped would help him consolidate power in just over a month, in the form of a stark warning to Greece’s European partners: Pushing Greece out would be “cutting the branch that we’re all sitting on.”