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Greek crisis: Prime Minister Alexis Tsipras resigns and calls new elections

Milos Bicanski/Getty Images

Greek politics is back in the headlines this week. After Prime Minister Alexis Tsipras signed a controversial austerity deal with European leaders earlier this summer, he faced a left-wing rebellion that cost him his parliamentary majority. That created a political crisis for Tsipras and his Cabinet, so he's calling for new elections on September 20.

If you're tired of reading about Greece versus Germany and eurozone debt considerations, never fear — this almost certainly does not represent a resurgence of a Europe-wide political crisis.

Quite the reverse. All signs are that the election will completely marginalize the Greek left, and the old establishment political parties, making Tsipras the absolute master of the scene and giving him freedom to implement the deal.

Can you remind me how we got here?

Sure. In brief:

  • The Greek government was deeply in debt, largely though not exclusively to private banks owned by foreigners.
  • By 2010, it became clear that Greece could not pay what it owed.
  • Other European states let Greece pay off those debts by giving Greece a bunch of new loans at an interest rate far below what Greece would have paid on the private market.
  • In exchange, Greece had to reduce its budget deficit and also agree to a package of economic policy reforms.
  • This was deeply unpopular in Greece, and the Greek economy performed very poorly. So in 2015 a previously marginal left-wing political party called Syriza swept into power promising to generate a better outcome.
  • After months of sporadic negotiations and then a couple of weeks of intense crisis, Syriza failed to get a better deal and Tsipras essentially capitulated to creditor demands.

As you might expect, abandoning all of Syriza's main campaign pledges was somewhat controversial inside the party. Many Syriza leaders, especially those associated with the inter-party group called the Left Platform, opposed the pirouette.

The terms of the agreement between Greece and its creditors require various parliamentary votes to implement various changes. This week, enough Syriza MPs began defecting that Tsipras could only secure a majority for his proposals by relying on votes from the center-right New Democracy party. In Greece's parliamentary system, that made Tsipras's position untenable, so he has called for new elections.

So Tsipras alienated everyone and is now doomed, right?

Quite the opposite! To many foreign observers, Tsipras's tenure in office has been a complete catastrophe. He's incurred many of the costs that would be involved in Greece leaving the Eurozone altogether but secured none of the benefits. He put Europe through months of wrangling and the Greek economy through a terrifying week of near-collapse, all just to secure a deal he could have had in February. He's broken all his campaign pledges, and seemingly abandoned the agenda that made him popular in the first place.

But Syriza is enjoying an 18 to 20 percent lead in the polls over New Democracy, and Tsipras personally has a 60 percent approval rating.

Unless something changes dramatically in the next month, new elections should cement his status as Greece's dominant political figure. Dissident Syriza MPs will be purged from Syriza's electoral lists and replaced with loyalists. The dissidents don't have nearly enough time to organize a new political party. The mainstream parties Syriza crushed in January will be crushed again.

Even better, the brief dissolution of parliament will give Tsipras the chance to reshuffle his Cabinet to ensure a new team that is loyal to him and prepared to implement the deal.

Why is Tsipras so popular?

There seem to be three main factors underlying Tsipras's dominance of the political scene.

  1. Nobody in Greece is willing to make the case for leaving the eurozone. Many people who are not Greek thinks this is a good idea, but it is very unpopular in Greece, and nobody in Greek politics has articulated the case for it in a convincing way to any slice of the electorate. Absent a constituency for leaving the Euro, there's no viable left alternative to Tsipras.
  2. The mainstream parties are completely discredited. Point one tends to indicate that the government Tsipras beat back in January — a grand coalition between New Democracy and the center-left party Pasok — was actually not nearly as bad as Tsipras said it was back then. But the collapse of the Greek economy since 2008 and the revelations about the scale of government borrowing before then have managed to massively discredit those parties. Pasok's entire constituency has basically vanished in favor of Syriza, and New Democracy remains badly tainted by past failures.
  3. Tsipras is a fighter. Greek voters appear to appreciate how far Tsipras was willing to push the limits in pursuit of a better deal. There's a sense that perhaps Greece's two previous prime ministers — ND's Antonis Samaras and Pasok's George Papandreou — were a little too eager to please European partners and the global financial community. Tsipras gets credit for genuinely trying his best.

What time is the Greek election?

The vote is on September 20.