Tsipras Says More Austerity “Final Blow” for Greece

Greek Prime Minister Antonis Samaras is trying to persuade his reluctant coalition partners to go along with a $17.45 billion spending cut and tax hike plan, the major opposition party Coalition of the Radical Left (SYRIZA) leader Alexis Tsipras renewed his opposition and said more austerity would be the end of Greece.
“If these measures are implemented, it will be the final blow for the Greek economy,” he told Reuters in an interview, noting that economic output had already shrunk by 25 percent during a five-year recession, putting nearly two million people out of work and closing 68,000 businesses, with as many as 130,000 more said to be on the edge of failing.
“We have never seen anything like it in modern European history in a country at peace. Greece is like a country ravaged by war,” he said. Greece is awaiting a $38.8 billion loan installment from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that Samaras said the country needs to avoid going broke.
The New Democracy Conservative leader said Greece only has enough cash in the bank to last until Nov. 16 but objections from his partners, the PASOK Socialists and Democratic Left, over tough changes in labor labors are holding up a deal. The Troika said it won’t release any more money, including a second bailout, of $173 billion, until more reforms are implemented.
But Samaras also said that 85 percent of the next installment will go to recapitalizing the country’s beleaguered banks, who were among investors who suffered 74 percent losses imposed by a former government, and the rest of the money will go to pay outstanding bills.
That would still leave Greece dependent on tax revenues that have been faltering because of austerity measures that have made many Greeks slow spending almost to a standstill, while tax hikes have driven many companies – including Coca-Cola, the largest corporation in the country – fleeing to other countries, further depleting the tax base.
Tsipras, a 38-year-old former student Communist, said his party would vote against the package expected to go before Parliament next week, and called on members of the ruling coalition to break ranks and do the same. SYRIZA finished second in the June 17 elections – held because a first round a month earlier failed to give any party enough of the vote to form a government.
Polls now show the party has surged into first place past New Democracy and would win if new elections were held. Tsipras has vowed to break the deal with the Troika because he said the pay cuts, tax hikes and slashed pensions have been too much for Greeks to deal with, but Samaras said without the aid that comes with them that Greece will be forced out of the Eurozone and into complete collapse and chaos.
PASOK, which won 44 percent of the vote in 2009 when it gained the Prime Minister’s office, has fallen to 5.5 percent because of its support for austerity, while the Democratic Left has gone as low as 4 percent, while the anti-austerity, anti-immigrant, anti-gay, anti-Semitic neo-Nazi Golden Dawn party that won 18 seats in Parliament has soared into third place with about 14 percent in recent polls.
Despite their strong position, SYRIZA would not push Greece to fresh elections by resigning their parliamentary posts said Tsipras. “Our top priority is to overturn this policy. It is not a time for tricks, it is not a time to provoke the fall of the government,” he said, adding his party would continue to oppose austerity measures from the parliamentary benches.
Tsipras said he had no desire to see Greece exit the Eurozone but the government and its European partners had to recognize that the country could not afford to pay its debt. “Greece is already bankrupt, it’s just that its banks have not been allowed to fold because the entire European banking system would be threatened with bankruptcy,” he said.
Thorough economic reform would require the nationalization of the entire banking system, which had bankrolled traditional political parties, Tsipras told Reuters. He said that continuing to pay mountains of debt would turn Greece into a “colony of Germany and other powerful Eurozone countries”
“We risk the ruin of the European ideal: a Europe split into north and south. The only way of this idea surviving is through solidarity,” he said, calling for a European “Marshall Plan” in which rich countries would invest in poorer ones. He said if other indebted euro countries such as Spain followed Greece along the path to severe austerity, it could encourage extremists such as Golden Dawn movement. “What we are seeing now in Greece will happen in one or two years in those countries,” he said.
Tsipras said he was disappointed by the lack of support for Greece from Europe’s left, notably France’s Socialist President Francois Hollande who was elected in May with a pledge to resist back German-led austerity in the Eurozone but who has supported austerity for Greece while fighting it in France. “We expected more of Francois Hollande,” Tsipras said, adding the French leader had not taken a stand against German Chancellor Angela Merkel.