Greece’s Glimmer of New Year Hope

The potential election of Kyriakos Mitsotakis as head of Greece’s main opposition party would be a watershed moment, Simon Nixon writes

The Wall Street Journal

By SIMON NIXON

Jan. 6, 2016 3:35 p.m. ET

It is easy to list what might go wrong in Europe in 2016: a global economic slowdown that rekindles fears over eurozone debt sustainability; a worsening refugee crisis that leads to the collapse of the Schengen passport-free travel zone; increased political instability as a result of rising support for populist parties; plus the possibility that the U.K. might vote to exit the EU in a referendum likely later this year, which would trigger a political earthquake that would destabilize the entire continent.

Less easy is to identify what might go right—what could happen in 2016 that might reverse the pervasive sense of impending doom. But one positive surprise could occur this weekend when Greece’s main opposition party, New Democracy, votes to choose its new leader.

This election pits veteran party insider Vagelis Meimarakis—who served as interim leader during September’s snap election, in which the party failed to increase its share of the vote—against Kyriakos Mitsotakis, a 47-year-old Harvard-educated free-market reformer who has campaigned for the leadership on a message of radical overhaul of both his party and his country. In the first round, Mr. Mitsotakis trailed Mr. Meimarakis by 27% to 40%. But in this weekend’s second round, Mr. Mitsotakis may yet come out on top after securing the support of two of his defeated rivals.

In many respects, Mr. Mitsotakis is an unlikely standard-bearer for uncompromising reform of Greece’s corrupt political and economic system. He is the son of a former prime minister, albeit one of the few precrisis prime ministers to attempt to grapple with Greece’s deep problems, and his elder sister is a former deputy party leader, leaving him vulnerable to the charge that he is just another dynastic politician. Critics also accuse him of lacking charisma and being a poor media performer.

But Mr. Mitsotakis was widely regarded as one of the most effective ministers in the previous government, winning respect from Greece’s creditors for his efforts to streamline the dysfunctional public administration and introduce new concepts such as promotion on merit. Meanwhile, his sister’s refusal to publicly endorse his candidacy, which is widely assumed to reflect her aspirations for her own politically ambitious son, could be said at least to show that Mr. Mitsotakis is his own man.

Mr. Mitsotakis’s election would be a watershed moment for Greece, coming almost exactly a year after the election that brought the far-left Syriza government to power, triggering six months of brinkmanship that almost ended in the country’s ejection from the eurozone. Mr. Mitsotakis would have a mandate to overhaul his near-bankrupt and deeply discredited party. The door would be open to reposition it as a modern center-right, pro-European, pro-business party that could hope to serve as a rallying point for all of Greece’s centrist political forces, including those left stranded by the near-extinction of the center-left Pasok party and the political failure of the pro-business insurgent party Potami.

This could have important implications for Greece. As things stand, Greek Prime Minister Alexis Tsipras has taken full advantage of the fact that politically he is the only game in town. Although on the surface, Syriza has been complying with the terms of its bailout deal, eurozone officials warn that a showdown is looming this year as the bailout program comes up for review: The International Monetary Fund, whose participation is a political necessity for the eurozone, is certain to push for deeper reforms in areas such as the labor market and pensions system beyond anything Mr. Tsipras is willing to contemplate.

Syriza, meanwhile, is pushing ahead with its “parallel program,” including measures taken without consultation with its creditors that could have a profound impact on Greece’s long-term economic prospects. It has stuffed the public administration with its own cronies and has vowed to roll back past education reforms that were designed to introduce meritocracy and attract global talent into Greece’s university system in favor of a return to the old politically driven appointments system.

A reformed and reinvigorated New Democracy capable of providing robust opposition could put pressure on Syriza to live up to its own ambitious but largely unfulfilled reform promises. It would also raise the spirits of Greece’s beleaguered private sector, whose fortunes are critical to Greece’s economic prospects. Businesses would take comfort that at least part of the political system is responsive to their needs.

And it would provide Greece’s creditors with extra leverage in their demands that Mr. Tsipras delivers on his bailout commitments, relieving him of his trump card: his claim that the most likely alternative to his leftist government would be an extreme right-wing government in thrall to the neo-fascist Golden Dawn party.

But a victory for Mr. Mitsotakis would also resonate beyond Greece. The surge in support for populist parties across Europe has always reflected much more than simply a rejection of austerity or hostility to the EU; from the inconclusive elections in Spain and Portugal at the end of last year to Greece itself, it has been driven primarily by a rejection of an old political order that was widely seen as corrupt.

If, after all that Greece has been though in recent years, its largest party chooses as its leader the candidate promising the most complete break with the past and the greatest challenge to his party’s most powerful vested interests, it would send a signal that political renewal in Europe is possible, even under the most-unpromising circumstances.