When Alexis Tsipras went to vote on June 17, 2012, television channels from all over the world gathered around the school auditorium where he was casting his ballot. Someone unfamiliar with Greek politics might have supposed that this blaze of publicity was focused on a rock star or world leader. Who, after all, was Alexis Tsipras? As the head of the parliamentary group of SYRIZA (Coalition of the Radical Left), he had led a motley confederation of small leftist parties to an underwhelming 4.6 percent of the vote in the 2009 elections. That same year, his position as informal leader had been vehemently challenged even within the coalition. Nevertheless, the absence of any alternative leadership combined with his own tenacity and tactical flexibility enabled Tsipras to survive inside SYRIZA.
As roulette players know, if you can stay in the game, you may be able to turn it around. With 26.9 percent of the vote in the June 2012 elections (and just 29.7 percent for the center-right New Democracy), SYRIZA has turned its self-destructive tendencies into a political triumph. By making Greece the first case in the West since the collapse of communism where the radical left has overtaken the traditional social democratic mainstream, SYRIZA has become a critical political force within Greece and an object of fascination (and scorn) without. Thirty-one years earlier, in 1981, during another earthquake election, PASOK (the Panhellenic Socialist Movement), Greece’s traditional party of the left, laid the foundations for its long rule in Greek political life. In 1981 PASOK was riding the crest of a great electoral wave that had carried it from just 13.58 percent of the vote in 1974 to the 48.7 percent that it received that October. This realignment produced one of the most stable party systems in Europe, with very low electoral volatility, organized around two parties: PASOK’s socialists and New Democracy’s conservatives.
More than any other party at any other point in Greece’s postwar history, PASOK in 1981 embodied the socially widespread conviction that “everything is possible.” Nothing better symbolizes PASOK’s aspirations during its first term in office (1981–85) than its incomes policy. In January 1982 the newly elected government announced a 46.4 percent increase (on average) in the basic wage, and a doubling of farmers’ pensions. As noted perceptively by the economist Chrisafis Iordanoglou, “the pay increases…were unexpectedly large even for the recipients themselves. The objective was that they should be engraved in people’s memory for years.” The initiative helped launch what was to be a more than thirty-year ascendancy, which would end in political ruin during the Greek debt crisis.
PASOK Changes the Fiscal Paradigm (1981–89)
PASOK, with a Keynesian program for expanding overall demand, attempted to revitalize economic growth and to implement what it called “the third way to socialism.” A central element in PASOK’s economic and social strategy was a policy of redistribution. There was a steep overall rise in social expenditures from a modest 10.2 percent of GDP in 1980 to 16 percent in 1985 (the end of PASOK’s first term in office), stabilizing at 15.5 percent in 1989 (the end of the party’s second term). The establishment of the National Health System in 1983 was central to the construction of a genuine welfare state—and another symbolic move strengthening the party’s left-wing image. PASOK’s Keynesian program, like that of the French socialists, did not, however, have the anticipated results. The government deficit more than tripled in 1981, PASOK’s first year in office, to almost 8 percent of GDP and climbed to 12 percent in the closing year of PASOK’s second term. Alongside the deficit, the national debt also ballooned, nearly tripling between 1980 and 1990 to 80.7 percent of GDP. The major reason for these worrying trends is familiar to any observer of Greece today: the absence of credible taxation policies and tax administration.
The prevailing view that the Greek state has always been “wasteful” is thus incorrect. Until 1980, with the exception of the mild relaxation of the first democratic period (1974–80), postwar Greek governments had pursued—with “German,” as it were, assiduity and success—policies of fiscal discipline. PASOK’s first period in government (1981–89) was a watershed. A long tradition of balanced (or approximately balanced) budgets was abandoned in an active and aggressive manner, and Greece entered a high-risk zone from which it has never succeeded in extracting itself.
PASOK and the Incomplete Fiscal Rationalization (1993–2004)
Beginning around 1993 under the leadership of Andreas Papandreou and Costas Simitis, PASOK embarked on a “modernizing” phase in which the party reduced inflation and fiscal deficits, liberalized markets, and moved away from income redistribution. By 2000 the country was running a primary surplus (the budget surplus not including interest payments), as it would the next two years. Most significant of all, however, was Greece’s entry into a period of high growth rates (higher than those for the Eurozone as a whole), marking the third great wave of Greek economic expansion after those in 1930s and 1960s. However, along with these positive trends, several negative ones also appeared, most notably a significant deterioration in the balance of trade. Notwithstanding the growth in GDP, the Greek economy appeared to be trapped between the low-labor-cost economies and the high-labor-cost, high-innovation economies. In addition, sovereign debt remained high, fluctuating at levels of around 100 percent of GDP.
During Simitis’s second term (2000–2004), there was a further relaxation of fiscal discipline. The goal of entering the Eurozone fueled a significant increase in tax receipts, but almost immediately after the decision in favor of Greek entry (Greece joined the Eurozone on the basis of 1999 figures), they began to fall again. In short, PASOK under Simitis failed to carry out—in the favorable conditions of high growth and low interest rates—the type of genuine, long-lasting fiscal reforms Greece desperately needed. Indeed, it was at this point that the slide toward bankruptcy began.
The Scandal of Tax Evasion
Historically, the Greek public sector was limited in size, much smaller than the average in the countries that would eventually become the Eurozone. While the majority of European countries had some variety of social democratic compromise, this did not happen in Greece because of the civil war. The extraordinary electoral dynamic of PASOK in the 1980s was a direct corollary of this historical vacuum. Between 1980 and 2004 the Greek public sector expanded so remarkably that it came close to equaling the Eurozone average. But it faced a chronic shortfall in tax receipts at the same time, below the rest of the countries in the Eurozone.
Greek debt, in short, is the product of thirty years of budget deficits driven by proportionately low tax receipts. This shortfall is what distinguishes Greece from the rest of Europe—not the absolute level of expenditures. What is key to the Greek tragedy, in other words, is not so much the size of the state as its inefficiency, the most pronounced characteristic of which is the inadequacy of the tax administration. And responsibility lies with politicians and governments, many of which were dominated by Socialists. The problem of tax evasion by many sectors of Greek business and the self-employed is one that should have been tackled by the left. The term “scandal” is fitting here: what kind of social democratic party could allow taxation to fall disproportionately on wage earners?
Superficial Social Democracy
There are four policy factors that explain PASOK’s past electoral supremacy: the implementation of advanced social policies, democratic and liberal political measures adopted by PASOK governments, the implementation of culturally liberal reforms affecting private life and relations in civil society, and, in a later phase, PASOK’s leading role in promoting the European perspective. The success of PASOK was the result of the cumulative impact of these factors. To a certain extent PASOK did indeed adopt ideas and pursue policies of a social democratic type. But while PASOK’s achievements were real, economic policy and social and institutional reform were often given short shrift, and herein lies the rub: PASOK never evolved beyond being a “superficial,” fundamentally incoherent social democratic party.
Greek debt, in short, is the product of thirty years of budget deficits driven by proportionately low tax receipts. This shortfall is what distinguishes Greece from the rest of Europe—not the absolute level of expenditures.
Although PASOK did pursue an expansionary income policy, extended and deepened the welfare state, maintained relatively friendly relations with trade unions by promoting their participation (however fragmentary) in policymaking, and espoused “social democratic” rhetoric, its scandalous toleration of tax evasion undermined many of its other accomplishments. In addition, PASOK allowed the flourishing of clientelistic relations between the party, government, and the bureaucracy; was relatively indifferent toward social outsiders like the unemployed; cultivated intimate, scandalous relationships with a segment of the Greek business milieu; and had little in the way of a coherent strategy for encouraging a competitive and outward-looking private sector.
Moreover, within its own coalition or voting bloc, PASOK allowed a variety of destructive tendencies to flourish, including a lack of wage restraint on the part of trade unions affiliated with PASOK, a growing disjuncture between wage earners in the public and private sectors (the former was permitted to grab whatever it could get away with), and the development of a labyrinthine and economically devastating set of regulations and deregulations in numerous professional sectors. Taken as a whole, these policies are antithetical to social democracy (however broadly defined) and helped bring Greece to the place it is today.
SYRIZA in Context
SYRIZA’s backstory begins in 1968 with a profound restructuring of the Greek communist movement. The KKE (Communist Party of Greece) split into two currents: orthodox communists who remained with the KKE and Eurocommunists who formed the KKE Interior. The Synaspismos coalition, established in 1992, represented the convergence of the Eurocommunists and the “critical Communists” who, through yet another split (less dramatic than that of 1968), had departed from the KKE. SYRIZA began as a confederation of leftist organizations created in 2004 around the nucleus of Synaspismos.
SYRIZA more than doubled the electoral influence of the old KKE Interior, averaging about 4 percent of the vote between 2000 and 2010. This enabled the left outside the KKE to be more active in popular mobilizations and civil society initiatives, and SYRIZA thus exerted a larger influence on politics than would be expected by its still low electoral returns. SYRIZA challenged the KKE on its own radical terrain and sought to change the intra-left balance of forces. But SYRIZA’s origins also explain some of its weaknesses: its confederated structure (prior to its recent conversion into a unified party in July, SYRIZA had thirteen separate tendencies) has negatively affected the party’s cohesiveness and style and limited its ability to generate fresh programmatic thought. Instead, SYRIZA has primarily generated condemnatory discourse and ideological long-windedness, exhibiting a tendency to repeat old-guard communist clichés.
Without the shock of the economic crisis, SYRIZA’s meteoric rise would not have occurred, and without Alexis Tsipras’s leadership and strategy, SYRIZA would not have become the main party of opposition. The June 2012 elections were more divided on class lines than any other in the entire democratic period: in the lower-class neighborhoods of greater Athens, SYRIZA’s 36.5 percent of the vote was 9 points higher than the combined vote for New Democracy and PASOK.
More than a year after SYRIZA’s exceptional electoral performance, it remains the only bearer of an alternative projet de société; all the other opposition parties (with the idiosyncratic exception of the KKE) have embarked upon a course of competitive demagogy, gaucherie, and irresponsibility. But despite its newly pivotal position in the Greek political order, SYRIZA does not appear to have the quality of political personnel, the strategic perspicacity, or the alliances inside and outside of Greece that would be required to deal successfully with the current crisis.
Within SYRIZA itself doubts and debate about its current status can be heard. The “realists” wonder what their real margin for movement will be within the hostile structures of the EU. How many painful compromises must they accept? Can they, if they come to power, keep the party united? The party’s left wing (approximately 30 percent of the membership) has been radicalized: it favors leaving the Eurozone and “opening the road to socialism.” (Both proposals are supported by only a minority of Greece’s population.) The disagreement over such key issues undermines the party’s cohesion and strategic maneuverability. These problems would make it difficult for Tsipras, in the event he is elected prime minister, to reach an “honorable compromise” with Greece’s partners (and creditors) in the EU.
A New Laboratory for the Radical Left?
Historically, Western Europe social democrats promoted four great sets of changes: democratization, cultural liberalism, social protection and integration, and social equality (through some kind of economic redistribution). PASOK’s long ascendancy did indeed include a large number of policies that fit in this framework. Nevertheless, neither the PASOK of Andreas Papandreou (1981–1996) nor the PASOK of Costas Simitis (1996–2004) was able to develop the economic and institutional underpinnings of a truly successful social democratic strategy. PASOK was a composite and inconsistent party, simultaneously the spearhead of the social democratization and modernization of Greek society and the principal obstacle to these processes. PASOK—and not only the “populist” PASOK of the 1980s—was indeed a central actor in the drama of Greece’s bankruptcy.
Does PASOK’s trajectory have anything to tell us about European social democracy, or is it an extreme case from an extreme country, far from the problems of the more developed economies of Europe? Greece is a peculiar, discordant, but modern country. In the years between 1954 and 2008 it was, in terms of GDP growth, one of the strongest economic performers in Europe. The example of PASOK is certainly extreme but it is not irrelevant; what is clear is that without an effective economic strategy combined with a well-targeted redistributionist policy, projects for maintaining the European social model are doomed to fail. This became evident more rapidly and more profoundly in Greece than elsewhere but it applies to the whole of the European left, particularly in the current era of globalization.
PASOK obtained just 12.28 percent of the vote in the elections of June 2012. Is the party “finished”? Social democratic parties have shown an admirable capacity to renew themselves and survive. PASOK is undoubtedly very close to the edge, but it may figure out a way to bring itself back. Predictions that do not to take into account previous historical trends risk proving over-hasty.
The Greek left is now being led by a radical party. The post-communist SYRIZA lacks both the preparation and the governmental culture for such a task—both of which the radical PASOK of the 1980s lacked, too. However, SYRIZA has matured to a significant degree. Its economic policy has changed gradually during the three years of the debt crisis, moving in a similar direction to the path taken during the 1930s by social democrats in Sweden and New Deal Democrats in the United States. But globalization and European integration place huge external constraints on SYRIZA that governments did not face, at least not to the same degree, during the Great Depression.
SYRIZA’s economic proposals are largely inconsistent with EU policies. If SYRIZA wins the next elections (which will occur no later than 2016), it will be called upon to deal with problems of a truly historic nature as well as its own internal—and profound—contradictions. Nothing better describes these contradictions, not just in SYRIZA but across the entire new radical left in Europe, than the title of an article from the political scientist David Arter: “Communists we are no longer, Social Democrats we can never be.” Whether Greece is the laboratory of the future for the European radical left or a workshop with old technology that will repeat failed experiments is the question that SYRIZA will need to answer.
Gerassimos Moschonas, PhD University of Paris-II, is an associate professor in comparative politics at Panteion University of Political and Social Sciences, Athens, Greece. He is the author, among other books, of In the Name of Social Democracy: The Great Transformation, 1945 to the Present (Verso, 2002). His current research is mainly focused on European integration and the parties of the left.