January 28, 2015

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Is Tsipras going to use Russian sanctions as bargaining chip?

Day 1 of the new Tsipras administration - and the frontlines are already clear. The defence and foreign ministers in Tsipras' administration - Panos Kammenos and Nikos Kotzias - are clearly pro-Russian as is Tsipras himself. The ministry appointments suggest that the Syriza-led government may try to shift the direction of Greece's foreign policy closer to Russia or at least use this as leverage in talks with the eurozone, writes Macropolis. Kammenos, the leader of the Independent Greeks, has visited Moscow a few days before the end of the election campaign.  One of the first moves of Tsipras was then to complain to Federica Mogherini about a joint EU statement asking for sanctions against Russia. Tsipras’ office told Reuters that the EU should still have secured consent from Athens before issuing this statement.

One of the first decisions announced by the new government was stopping the planned sale of a 67% stake in the Piraeus Port Authority, agreed under its international bailout deal for which China's Cosco Group and four other suitors had been shortlisted, according to Reuters. Not a good start in negotiations with EU lenders, despite all concilliatory reassurances from Varoufakis and Dragasakis. 

There is a flood of legislation in the pipeline, with the first bill on minimum wages and collective bargaining. Apart from that the Syriza government also has to find a president, points out Kathimerini. There was a flurry of speculation on Tuesday that the government’s candidate would be former PM Costas Karamanlis. Another candidate in discussion is Greece’s representative at the European Commission, Dimitris Avramopoulos. If he is to be chosen, this would free up his spot in Brussels to be taken by a Syriza candidate, possibly one of the party’s MEPs, Dimitris Papadimoulis. 

Among the new 41-member strong government, only four are from the Independent Greeks. And as the Spanish and the Italian media noted, there is not a single woman among the 41. As expected, the outspoken Yanis Varoufakis became finance minister. He announced on his blog that he will continue blogging despite his new day job (though he can hardly criticise the Greek government any more).

Yiannis Dragasakis is the new deputy prime minister, overseeing the negotiations with Greece's lenders. He is the only one with some minimal experience in governing. The economics professor Dimitris Mardas will be in charge of restructuring the tax collection mechanism and to prepare for changes to property and income taxation, writes Kathimerini. Another key post, in charge of the enlarged Economy Ministry, went to economist Giorgos Stathakis. In line with Syriza’s campaign promises to slim down government, the party has merged Greece’s development ministry with three other ministries charged with transport, merchant marine and tourism.

Two appointments were well received, suggesting that Tsipras is serious about tackling corruption and problems in the justice system: The well respected law professor Nikos Paraskevopoulos has been appointed as the new justice minister. The appointment of the former head of Greece's anti-money laundering authority Panayiotis Nikoloudis is the head of the new government's anti-corruption ministry. Nikoloudis has been credited with uncovering a number of financial scandals and will be responsible for tackling graft in the public sector. 

Klaus Kleingut writes in Neue Zurcher Zeitung that the biggest challenge for Tsipras is to keep his party together and to get a deal with the troika to avoid default. This means he needs to sell necessary compromises with international lenders to the radical left wing in his party, and give up some of his campaign pledges. The question is whether Tsipras has the format of such a leader. His idol is Andrea Papandreou, who managed to steer away from the EU exit he had promissed on his campaign without losing support of his party. To get a deal with the troika, Tsipras will have to deliver on reforms. If Tsipras can deliver on reforms, there will be a way forward. Kleingut also writes that the pressure to get a deal will increase as deposits continue to flea the country, and a default is certain without a deal. If it is only about selling, they could just change the name from 'Memorandum of Understanding' to 'Development plan' and then Tsipras could claim that he abolished the Memorandum without endangering the finance. Syriza repeatedly said there is no plan B for financing. So something has to give. 

Our other stories

We also have stories on the hardening German reaction to Tsipras and his government, and to a surprising reaction from the Spanish government; about the latest obstacles to the Juncker investment plan, and our take on Italy’s presidential elections.

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