Alexis Tsipras was sworn in Monday as the new prime minister of Greece. His anti-austerity ideology worries some European economies, but encourages others who hope to follow suit and stop policies of austerity.
On Monday, Alexis Tsipras was sworn in as the new prime minister of Greece. Sunday’s election saw a majority of voters choosing Tsipras, whose platform includes efforts to step away from the bailout that has put Greece in serious debt. The election of the Syriza party reflects the frustration of the Greek population towards the austerity caused by the large loans from the European Central Bank.
Tsipras’ Syriza party is a left wing party that has communist roots. The new prime minister himself was a student communist and became the first prime minister to forego a religious ceremony that includes the Bible and Greek Archbishop. Members of the European Central Bank fear that Tsipras new policies that aim to cancel, or at least restructure, the debt that Greece owes. Greece is currently 240 billion euros in debt to the ECB.
Greece has been in an economic slump for the past five years, and the large loans came with drastic budget cuts. Public works and many government services were discarded in the austerity.
In addition, the Syriza party began the new government leadership in a coalition with the far-right Independent Greeks party. Though the two parties have opposing viewpoints for the majority of issues, such as immigration, they agree on an austerity-free Greek economy. However, the decision to join with the far right group has caused Syriza to lose some left-leaning political allies.
Though the election of the Syriza party is a heavy shift for Greece, many believe it is unlikely for the country to depart from the eurozone and cut ties with the European Central Bank altogether. Greece is currently in need of money, and without the help of the ECB, the economy will capsize.
Germany, one of the strongest economies in the eurozone, has largely dictated the policies of austerity throughout Europe. Many Germans fear that negotiations with Tsipras promoting leniency with loan repayment would be detrimental to the German economy. Besides the issue with the new Greek prime minister, Germany’s chancellor Angela Merkel must confront the European Central Bank’s new plan to increase euros and fight deflation at the risk of inflation.
Further, Greece’s new leadership, and potential debt negotiations, might encourage other indebte nations to follow suit. This possible trend would hurt the German economy and the eurozone.
