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Next Steps For Greek Politics: The Syriza "Endgame" According To Deutsche Bank
As detailed here earlier, Greek PM Alexis Tsipras will attempt to win back the support of more than 30 Syriza lawmakers who defected to vote against the first set of bailout prior actions last week. The move destabilized an already tenuous political situation, laid bare the divisions within Tsipras’ party, and raised the possibility that the PM could face a vote of no confidence and early elections.
For now, Tsipras’ plan is to pass the second set of prior actions with the help of opposition lawmakers, begin formal discussions on the third bailout program, and convene a Syriza meeting in September to discuss how the party can move forward considering all that’s happened since the group swept to power in January on an anti-austerity mandate which has largely fallen by the wayside.
Here to help sort out what has become a rather convoluted political situation and discuss next steps and the "endgame" for Syriza is Deutsche Bank’s George Saravelos.
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From Deutsche Bank
Potential political paths ahead
We see the situation as potentially leading to three different political outcomes over the next few weeks.
The first is near-term political instability that would put ESM negotiations on hold and return pressure on the Greek banking system ahead of the August 20th ECB bond redemption. This would be provoked by the PM tendering his government's resignation either by losing additional government MPs in coming parliamentary votes or by losing support in the party's Central Committee. Either would not necessarily cause a general election, with a government of national unity under very limited SYRIZA MP support possible until ESM talks are concluded (only 48 out of 149 MPs would be needed). Irrespectively, talks would be delayed, and the possibility of a more substantial shift in the SYRIZA position against the agreement could not be ruled out, whether before or after a new general election.
The second potential outcome is a Greek PM decision to more aggressively position himself against internal party dissent and in favour of program implementation. This would likely involve a request from dissenting MPs to resign their parliamentary seats or, in case of refusal, exclusion from the SYRIZA parliamentary group. Such a decision would aim to consolidate the PM’s influence, with the ultimate aim of moving the party towards a more moderate direction in a future general election. Current electoral law stipulates that a general election within 12 months of the last one takes place under a "list" system, providing the Greek PM with the political cover to steer SYRIZA's candidate list towards a more moderate direction.
Still, any such decisions need to be approved by the party's Central Committee. The latter is similarly responsible for excluding members from the party, even if the PM excludes MPs from the parliamentary group. Any such decision therefore requires the PM to take the risk of more formally splintering the party, with potential unpredictable results given his more uncertain influence over the party's Central Committee.
The third - and what we believe the most likely outcome in coming weeks - is a continuation of the last few days' status quo: persistent attempts by the PM to work through internal party dissent as well as the ESM negotiations, but without actively precipitating political change. In this instance the Greek PM would continue to preside over a de facto minority government, even if this is not explicitly acknowledged. A confidence vote may be called but dissenting MPs would still vote in favour and/or opposition parties would abstain. Any eventual ESM agreement would be ratified by a broad parliamentary majority, but with very strong SYRIZA dissents. Early elections could be called after. The benefit to this outcome is that near-term political uncertainty would be avoided, with dissenting and non-dissenting SYRIZA MPs as well as the opposition likely wanting to avoid near-term political instability. The cost would be that government commitment to the agreement would remain weak, maintaining the risk of a breakdown in negotiations as ESM negotiations get under way.
Whatever the outcome above, events over the next few weeks are most likely to continue to be driven by the PM's personal decisions as well as internal developments within SYRIZA. This will in turn depend on the ongoing economic and political cost of program implementation, with large upfront fiscal tightening already being legislated but additional fiscal and structural reform commitments needed to conclude the 3rd ESM program negotiations. The PMs own approval ratings will also matter, with opinion polls released after the negotiations continuing to show higher popularity ratings than other political leaders as well as a strong SYRIZA lead over other opposition parties. It remains to be seen how long this persists given the economic costs of the agreement, but the longer support is maintained, the greater the PM's influence over internal party politics is likely to be.
The endgame
Irrespective of the near-term outcomes above, the inherent contradiction of program implementation by a government from within which the bulk of opposition originates will have to be resolved. It is unlikely that uncertainty around the stability of the Greek economy and banking system recedes until this is the case.
Resolution could be led by Greek PM and current party president Tsipras moving SYRIZA in a more moderate direction followed by an early general election later this year after ESM negotiations have concluded. This would increase the odds of a government with greater commitment to implementation, irrespective of the electoral outcome. It would however risk a major splintering of the party or Tsipras' own loss of authority in the process. An alternative is that the party retains its own internal contradictions, but that a government of national unity with broader-based participation is formed irrespectively. However, it remains unclear if this could materialize without an early general election, which the opposition may eventually request.
Either way, implementation risks are likely to remain strong until greater political change materializes, likely driven by the strong internal contradictions within the current ruling party, but ultimately settled by the Greek PMs own political initiatives.
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The endgame is full European economic integration.
Tsipras is just another community organizer who is discovering the difference between making promises and implementing them.
The next logical steps for him are to start bombing a country he’s never heard of before and give all Greeks free Tsipraphones. ;-)
Looney
"stability of the Greek economy."
There is NO Greek economy. That's the problem, and has been the problem...
The economy of the city of Paris is larger than the Greek "economy." Greece needs to learn to live within its means. Or keep finding moron bankers to loan them money that they will again refuse to pay back.
They haven't had a real economy for years.
That's pretty stable i would say.
Damn.....is this a long Endgame.....or what?
Whenever I hear a reporter state that an accident victim's condition is stable, I think that being dead is also a stable condition.
The only thing that might save Greece right now is the everybody in the EU wants to stick their dick in at the same time. The EU has to all agree on the bailout and that looks mighty iffy.......
End-game:
Vourafakis is the new PM after a big bust up in the square (Synta whatever) in the next couple of months.
No peacable settlements allowed.
Amicability is not in the banker's dictionary.
pync
The Greek people had the sense to know that the obstacle is the way out of their predicament; Tsipras has bent over to suck at the tit and get fucked in the ass...Surrender is NOT the way to solve your problems. Fall down seven times, get up eight...
Mark my words. The end game for Syriza will be the end of Syriza itself. I promise you. This rag tag band of supposed saviours/ideologues are all well heeled but clueless to a very large extent.
The problem though is that the remainder of what is to be found in the Greek Parliament is about inspiring as my late grandmother's dentures.
Well, if history is any guide on this and Syriza folds we can look forward to a future of Golden Dawn. I find the irony of a Nazi having to negtioate with Germany utterly hilarious...
What time is the Greek Vote ? They talk about the Greek Vote all day but don't mention what time it is !!!!
It's a double secret vote.....need to know.....and all that.
So they pass whatever..none of it will be implimented....and that is the problem...there are more people working on ways to get around the new rules or laws than there are following them...
3 step end game..
1,,,the greatest depression the world has ever seen..
2...the greatest war the world has ever seen...
3,,,one world governance....one world currency...
Over all 500,000 of us.
The survivors, I mean.
""Wilson, take this non-Goyim's name"
NB: UK humour.
I doubt it. World wars are nasty messy affairs and impossible to predict the victor and shift in power.
A war could be won and the ruling class could still get a bullet to the back of the head. Too risky. They will just suck this corpse dry because that is all a parasite knows how to do.
Considering that "Plan B" was a 5 to midnight call to hook up another sugardaddy tells me that Syriza as a viable party is done.
Their ability to read tea leaves really sucks, and the condition that Greece is in makes that a fatal flaw.
That Greek parliament (?) building .... is not an unattractive building .... but, you'd think descendants of the Acropolis architects .... could have done a little better ?
Going against 61% of the population was the beginning of the end for Tsipras.
Mark my words...
When the pensions get swiped away via "haircuts" forced upon the Greeks by Germany's Fourth Reich through it's Troika, there will be blood on the streets. They will hang Tsipras by his tiny green olives.
Will Schauble be hanging still attached to his wheelchair?
I ask because the wheels could be put to good use. Thank you.
Long-Term Solution =
PURGE ALL COMMUNISTS & SOCIALISTS
AND
AND ALL ENTITLEMENT SOCIETY LAWS AND PROGRAMS