Eurozone Crisis: Greece's Syriza Proves Unfit To Govern

06/26/2015 02:49 pm ET | Updated Jun 25, 2016

As Alexis Tsipras' five-month game of brinksmanship with European and international creditors reaches a tipping point, the time for responsible decision-making has finally arrived. Despite all his bluffing, Europe has not blinked. After Tsipras' most recent concessions, there was an increasing sense of optimism that a deal may be at hand. However, the battle in the Greek parliament, and beyond, is already under way. Whether or not Tsipras signs an agreement, the survival of his government is at stake.

If no deal is reached with Europe, chaos will reign. Although Tsipras came to power on an anti-austerity mandate, he clearly has no mandate for a Greek exit from the Eurozone. If a deal is reached, it threatens to split the current government asunder with potential spillover into civil unrest as public debate intensifies. Recent clashes in central Athens may just be the start. Furthermore, releasing funds may take time. Last-minute jockeying by Tsipras and company may still prove too little, too late.

Furthermore, a new deal would completely violate Tsipras' campaign promises by extracting approximately 8 billion euros from Greek citizens over 2015 and 2016. Constituting one-third of Syriza, the hardline Left Platform claims it is engaged in an ideological struggle for the soul of Europe against neo-liberalism. Accordingly, it would vote against a deal and deny the government a parliamentary majority. Tsipras could still secure parliamentary approval with opposition votes. However, it would render his position somewhat untenable and amount to a vote of no confidence. Technically, Tsipras should resign as prime minister. Like 2012, a temporary technocratic government of national unity should be formed in preparation for new elections.

However, Tsipras' determination to continue as prime minister must not be underestimated. Should his government collapse, he may attempt to reshuffle his governing coalition with elements of Greece's center-left. After all, Tsipras is proving a mainstream politician: say whatever it takes to get into power and do whatever it takes to stay in power. Instead of defusing social tensions at home, the Tsipras government's inflammatory and provocative rhetoric fuels an increasingly polarized environment which breeds further hostility and confrontation. In Europe, it has also reopened old wounds dating back to the Second World War.

Five-months of experimental game-theory and practice by the Tsipras government has yielded no benefits. It overplayed its hand, wasted precious time and inflicted enormous damage on Greece which is clearly worse off now than it was five months ago. In fact, Greece is paying an even higher price economically, politically and diplomatically. A simple cost-benefit analysis says it all. In 2015, Greece's economy is contracting by 0.5 per cent. In 2014, the Greek economy grew by over 3 per cent. Tsipras' bluffing with creditors contributed to the political uncertainty resulting in commercial paralysis and further economic stagnation. Greece's ever-shrinking private sector has been decimated. Furthermore, Tsipras' archaic state-centric solutions to Greece's current ills are actually the same original policies partly responsible for the status quo.

With a population of ten million, Greece's current debt stands at over $350 billion which roughly leaves each Greek citizen with a bill of over $30,000. The numbers are simply staggering and unsustainable. Some forms of debt restructuring, relief, cancellation and reduction is inevitable at some future stage. However, before releasing any additional funds, creditors demand solid commitments and assurances of structural reform in line with other European Union member states.

The Tsipras government has also managed a remarkably unusual achievement: uniting all of Europe - unfortunately, and unanimously, against Greece. Its approach risks further diplomatic isolation and reducing Greece to rogue status in Europe and beyond. It squandered whatever goodwill it had in Europe upon assuming power in January 2015. The antics of Greece's egomaniacal finance minister, Yanis Varoufakis, burned bridges with peers. Tsipras' Jeckyll-and-Hyde approach with European leaders marked by diplomacy abroad and vilification at home galvanized his base but soured relations across the continent. In fact, some E.U. member states in central and eastern Europe have become more vociferous than Germany in criticizing Greece. At the recent G-7 summit, even U.S. President Barack Obama broke with protocol and actively called on the Tsipras government to get serious about negotiations. The head of the International Monetary Fund, Christine Lagarde, invoked the need for an adult presence in negotiations with Greece.

On the geopolitical front, Tsipras constantly alludes to closer relations with Russia to the detriment of western interests. Implied is the threat to break with Europe and NATO, some form of alliance with Russia and further instability in the Balkans. This obviously causes concern for the U.S. and allies in light of renewed East-West, post-Cold War tensions and fallout of conflict in eastern Ukraine. The Russia card may have ideological appeal to Tsipras and far-leftist acolytes. However, greater dependence on Russia to the exclusion of the west provides no viable future to Greece's long-term national interests. Becoming a conduit for Russian energy supplies into Europe is best achieved as a part of Europe, not outside of it. Furthermore, East-West hostilities would only increase with Greece outside of Europe.

For the past five months, the Tsipras government has presided over economic contraction, commercial paralysis, political polarization at home, diplomatic deadlock abroad and billions in withdrawals from Greek banks. Its inept posturing and reckless brinksmanship has backfired. Furthermore, it has failed to keep its anti-austerity campaign promises. Overall, this amounts to a vote of no confidence. Tsipras and company have simply proven unfit to govern.