After Greek Election Victory, Alexis Tsipras Faces Two Immediate Crises

Newly sworn-in prime minister must carry out contentious bailout plan and tackle migrant crisis

The Wall Street Journal

By STELIOS BOURAS And  NEKTARIA STAMOULI

Updated Sept. 21, 2015 2:34 p.m. ET

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ATHENS— Alexis Tsipras was sworn in as Greece’s prime minister on Monday after his left-wing Syriza party decisively beat its conservative rivals. But there is no honeymoon period for the 41-year-old leader.

He must quickly address a double challenge: the implementation of politically explosive pension cuts and other austerity measures under Greece’s bailout plan, and a migration crisis that Greece’s parties have mostly avoided dealing with.

After taking 35.5% of the vote, Mr. Tsipras moved quickly to form his new government. He announced a renewed coalition with the right-wing nationalist Independent Greeks, with whom he has a narrow majority, and he is now free of a dissident faction angry over austerity that defected to form its own party.

That give him the mandate to implement the tough fiscal retrenchment he once opposed. But he still has to prove he has the will to do it.

The head of the EU’s executive arm, European Commission President Jean-Claude Juncker, congratulated Mr. Tsipras on Monday in a letter. A spokesman for Mr. Juncker told reporters in Brussels that the commission is “particularly encouraged by the ample representation in the new Greek parliament of pro-European parties,” alluding to the fact that the vast bulk of lawmakers back the bailout deal.

But some EU officials pointed to the new Greek coalition’s slender majority in Parliament as a possible problem if some lawmakers start to balk at tough economic measures. The commission spokesman warned that the overhauls need implementing quickly. “There is a lot of work ahead and no time to lose,” he said.

Syriza officials said the next Greek finance minister would almost certainly be Euclid Tsakalotos, who held the post in July and August. Mr. Tsakalotos, who succeeded the flamboyant Yanis Varoufakis, helped Mr. Tsipras, then the prime minister, to negotiate Greece’s new bailout deal.

But it was unclear before the election whether Mr. Tsakalotos would be willing to take the role of finance minister again. Mr. Tsipras’s new cabinet will most likely be sworn in on Tuesday.

With all the votes counted, Syriza had won 35.5% of the vote, followed by 28.1% for conservatives New Democracy. The fascist movement Golden Dawn came in third place with 7%, followed closely by socialists Pasok at 6.3%. The Independent Greeks took 3.7% of the votes cast. The hard-line antibailout faction of Syriza didn’t win enough votes Sunday to enter Parliament. “The current government will need to both push through deep reforms and run the country at a time when liquidity has evaporated, the migrant issue has become explosive and when big decisions are still ahead,” said Michael Jacobides, associate professor of strategy and entrepreneurship at the London Business School.

Over the summer, Mr. Tsipras managed to push through Parliament some of the tax increases and other economic measures needed to clinch the country’s third bailout, worth €86 billion ($97 billion) in loans over three years. The next challenge is to implement these reforms in line with demands from Greece’s main creditors: other eurozone countries and the International Monetary Fund.

The continuing popularity of the Greek premier suggests that he and his left-wing Syriza party retain the authority to make the tough decisions. But the party’s weak commitment to the free-market, fiscally austere economic philosophy behind the bailout program means that full implementation of the deal in the medium- to longer-term isn’t guaranteed, analysts say.

On top of Greece’s economic woes, the country is at the center of Europe’s migrant crisis. Critics argue that the previous Syriza-led government did little to address problems arising from the thousands of refugees and other migrants entering Greece every day from Turkey.

The two coalition partners may now be forced to tackle the crisis, on which they have opposing views, potentially posing a major test for the stability of the government. Left-wing Syriza is considerably more liberal on immigration.

“It will be more difficult this time around to ignore their difference on this. The two parties are separated on a number of issues, but this is the biggest by far,” said David Lea, at Control Risks, a political-risk consultancy.

In Europe, markets were mostly higher, encouraged Mr. Tsipras’s resounding win, while stocks in Athens were flat after a weak start to the day.

Later Monday, Mr. Tsipras was expected to meet with Independent Greeks leader Panos Kammenos, to put together Greece’s new cabinet. Announcements on Greece’s new ministers are possible later in the day, party officials said.

According to Syriza officials, the new cabinet may include a “memorandum minister”—an official tasked with overseeing the country’s fiscal consolidation efforts who will lead negotiations with creditors.

—Viktoria Dendrinou in Athens contributed to this article.

Write to Stelios Bouras at stelios.bouras@wsj.com and Nektaria Stamouli at nektaria.stamouli@wsj.com