In Greece, Syriza Struggles to Deliver Promises as Money Runs Out

By JIM YARDLEYMARCH 22, 2015

The New York Times

ATHENS — Glowering with disdain, Evangelos Venizelos stepped into the well of the Greek Parliament and ridiculed members of the country’s new leftist government. They had vowed to roll back unpopular austerity measures that Mr. Venizelos and the prior government had pushed through. They had promised that Greece would stop kneeling to European creditors.

Mr. Venizelos, once a powerful minister given the task of defending austerity, offered a disgusted opinion: Who are you kidding?

“You were grossly unprepared and naïve,” Mr. Venizelos boomed during last Friday’s debate over a government amnesty program to collect unpaid taxes. He added: “The government is fooling itself by using double talk. They are saying one thing in the country and another thing to the lenders.”

Having promised an anti-austerity revolution, Prime Minister Alexis Tsipras and his Syriza party are now having a taste of comeuppance. Even as Syriza leaders say their program remains on track, the party is struggling to transition from rebel outsiders plotting to wrest Greek’s economic sovereignty back from Berlin and Brussels to running a government that is rapidly running out of money.

Infighting is worsening as hard-core leftist factions grow frustrated by some of the compromises made by Mr. Tsipras in his continuing negotiations with creditors. Critics on the left and right are questioning whether the government has a viable plan to restart economic growth. And still unresolved is whether the government can strike a deal with Europe to keep the country afloat, an issue that will be front and center on Monday, when Mr. Tsipras meets in Berlin with Chancellor Angela Merkel of Germany.

Greece’s finances have deteriorated as postelection anxiety over uncertainty about the bailout spurred a spike in bank withdrawals. Tax collections also plunged, raising questions about whether the government would be able to pay state workers and meet other obligations.

On Feb. 20, Greek leaders signed a four-month bailout extension with its three main creditors — the International Monetary Fund, the European Central Bank and the European Commission. Yet creditors have refused to release a critical 7.2-billion-euro, or about $7.8 billion, loan payment (money that Syriza had once vowed not to accept but that is now badly needed) until the government provides a list of acceptable structural reforms to replace pension cuts and other austerity measures that had been under consideration by the previous government.

Having held office for only two months, Mr. Tsipras’s government might seem to be facing grossly unrealistic expectations, yet they are largely self-imposed. During the campaign, Mr. Tsipras told buoyant crowds that Syriza would repeal punitive austerity laws — practically on Day 1 — rehire fired public workers, stop privatizations of state-owned assets, force creditors to write down the national debt and tackle the corrupt oligarchical business elites that dominate the economy.

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As yet, none of that has happened, and the contentious talks with European creditors have created a sense of parallel realities, as Mr. Tsipras and his outspoken finance minister, Yanis Varoufakis, continue to declare that Greece, not the lenders, are winning the standoff, even as they have already retreated from some campaign promises.

On the streets of Athens, Syriza remains popular even as many people say they are waiting for action. Antigovernment protests had mostly dissipated in the weeks after Syriza’s election. Yet on Friday, a youth wing of the Communist Party staged a demonstration outside a Finance Ministry building as it revived demands for the reinstatement of slashed university funds.

Syriza leaders reject any suggestion that European creditors are forcing them to walk the same line as their predecessors. Syriza had denounced the past government, a coalition led by the center-right New Democracy party, for allowing bureaucrats from creditor institutions to wield veto power on legislation.

“These bills will be written here, because we will not continue the practice of having technocrats writing our bills,” Mr. Tsipras said last week as the government introduced its first major piece of legislation, named the humanitarian bill, to provide relief to the poor.

Even as some European leaders have criticized Mr. Tsipras and Mr. Varoufakis for their confrontational approach to debt negotiations — and have accused them of stoking nationalist anger — the Greek public seems undisturbed. A new poll by Metron Analysis, sampling 1,000 people across the country, found that 41.9 percent of respondents would vote for Syriza if a new election were held, more than double the share of the New Democracy party.

Yet if still popular, Syriza is not united. Over all, Greeks appear overwhelmingly to want to remain in the eurozone. Yet analysts and past polls suggest that Syriza partisans are much more divided, a split that reflects other tensions. One far-left faction, led by Panagiotis Lafazanis, a government minister, is already pushing back against compromises that Mr. Tsipras has made to creditors on privatizing state assets.

“Lafazanis has vowed to stop any privatizations that fall under his jurisdiction,” said Vasiliki Siouti, a liberal political commentator who has written extensively about Syriza. She said some leftists had also questioned why the party had not yet moved to investigate and to tax business oligarchs long suspected of corruption. Others are frustrated that the government hasn’t yet repealed the existing terms of the bailout, known as the memorandum.

“They basically have accepted the memorandum,” Ms. Siouti added. “They have not annulled it.”

Some Syriza lawmakers have bluntly warned that the government has done too little to prepare for the possibility of a crisis — even a potential exit from the euro. Costas Lapavitsas, a Syriza lawmaker who in the past has supported leaving the euro, recently warned that an informed public debate over a Greek exit from the single currency is needed because party leaders know they cannot reconcile their political program with the demands of creditors.

“These two things are incompatible,” Mr. Lapavitsas told The Press Project, an English-language news website in Greece.

Greek news media are reporting that when Mr. Tsipras meets with Ms. Merkel on Monday, he will push for a compromise on privatizations.

In Athens, the government will continue rolling out its initial legislative program, after a delayed start. The humanitarian law provides subsidies on food, electricity, rent and public transportation to the desperately poor — fulfilling a campaign promise, even if the financial support is narrower than originally expected.

Friday’s debate was over legislation to provide an installment plan that would allow citizens or companies to repay overdue taxes while waiving penalties. Greek taxpayers owe the government €78 billion in arrears, and Syriza lawmakers expect the legislation to provide an influx of cash to state coffers as well as relief to citizens who had been facing legal action.

Yet in Parliament, opposition lawmakers seized on the title of the legislation — “Rebooting the Economy” — as an opportunity to pillory the government for lacking a real growth plan.

Adonis Georgiadis, a minister in the former government, said Syriza would eventually be forced to pass new austerity measures to appease creditors, or face a catastrophe if the loan money was shut off.

“You cannot admit that you are signing a new memorandum,” he said mockingly. “We want to welcome you to the memorandum.”

The new government is facing other challenges. On Sunday, a Greek newspaper reported that George Katrougalos, the deputy minister for administrative reform, had used his government position to help former law clients, an assertion that he and Syriza flatly denied.

Not far from Parliament, Evangelia Alexaki was also watching her new government with high expectations. She is a leader of a group of cleaning ladies who became national symbols of the harshness of austerity when they were fired from their jobs in the Finance Ministry. They have been sleeping in tents outside the ministry for months, demanding to be reinstated, and Syriza has pledged to introduce legislation soon to rehire them and other fired workers.

“If the government does not deliver,” she said, “they will find us against them.”

Dimitris Bounias contributed reporting from Athens.