By Changing Direction, Syriza Can Win Over Greece and Europe

by Spyros Lapatsioras, an assistant professor of economics at the University of Crete, is a member of Syriza’s economic policy committee.

JANUARY 27, 2015

Syriza won this week’s elections because the Greek people were furious with policies that led to an unemployment rate of 25 percent, a 25 percent reduction of the economy and an unprecedented rise in social inequality and poverty.

Some European officials have already indicated that in negotiating Greek debt, they would consider some of the targets of the new government: an end to strict deficit reduction, modernization of the state administration
and economic growth boosted by a mix of public and private investment.

New policies will ease people’s pain, help grow the economy and support negotiated debt repayment.
The distance between the new Greek government and European officials and creditors is not insurmountable. There is a growing understanding that Greece’s existing debt payment obligations actually strangle economic growth. And there is a range of technical solutions to the issue of sovereign debt that can be discussed.

At the same time, economic recession in the European Union, created by the dogma that the economy would grow if spending is cut, has created a political crisis, with the rise of the far right. The growing number of official voices that argue for alternative fiscal policies improves the bargaining power of the new Greek government.

The ability of Syriza to improve long-term economic conditions in Greece hinges on a break with the economic and political elites, whose roots go back in the post-World War II structure of the Greek state. These elites, who have benefited from their powerful positions as Greece has languished, are a long-term impediment to economic growth.

The new government must promote economic development based on a redistribution of wealth, income and power to the benefit of the lower social classes. This political achievement would secure social consensus for necessary institutional reforms.

In this domain, Syriza is in a much better position than previous governments, since Syriza does not have links to the establishment.

Of course there is no guarantee that Syriza can improve the country’s conditions in every aspect. But Syriza seems the best (and possibly only) card in the game.
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