Tsipras and Meimarakis Debate; Hung Parliament or Coalition Likely; El Dorado Gold Connection; Does it Matter Who Wins?

Former Greek prime minister Alexis Tsipras who resigned on August 20 in the wake of his historic cave-in to the Troika, engaged in a Head-to-Head TV Debate yesterday with New Democracy leader Evangelos Meimarakis.

Monday night’s debate featured sharp exchanges between former prime minister Alexis Tsipras, who last month triggered the snap election amid a rebellion in his leftwing Syriza party over a new EU bailout, and the centre-right New Democracy leader Evangelos Meimarakis.

Mr Tsipras repeatedly put his conservative opponent on the defensive, attacking Mr Meimarakis’ party as responsible for “40 years of financial scandals while in power” that had benefited the country’s business and political elite.

Mr Meimarakis countered the Syriza-led government had managed to bankrupt Greece in just seven months — to which a smiling Mr Tsipras hit back that this was like “someone who drank three bottles of whisky and a shot of vodka then claiming it was the vodka that had given him a hangover”. 

Syriza and New Democracy, with about 26 per cent of the vote each, according to forecasts, are well ahead of other rivals, but whomever wins will fall short of a parliamentary majority.

Mr Tsipras has repeatedly rebuffed [coalition] offers, and in a televised debate on Monday evening told Mr Meimarakis that any deal between the two parties after the election would be “unnatural”.

One subject that figured into the debate was the investment by Eldorado Gold of Canada in a depressed region of northern Greece, which leftwingers oppose even though the country’s supreme court has ruled that environmental permits are in line with international standards.

Mr Meimarakis made a point of bringing up the gold mining controversy in the debate, saying: “Syriza claims it wants investments to create jobs but you put thousands of jobs at risk just to score electoral points. You are driving away growth, not creating it”.

An unruffled Mr Tsipras replied: “We only want investment that won’t damage the environment.”

Does it Matter Who Wins?

If we define "win" as ability to form a government after the election, then how can it possibly matter? Both parties have bowed down to demands of the creditors. There is nothing much left to fight over.

The socialists and the conservatives are effectively one and the same.

Aside from minor squabbles such as El Dorado investment, Greek policy will be run by Germany, with the IMF on the sidelines pressuring Germany to offer more debt relief.

One would have to believe Germany hopes Tsipras loses as his final punishment for the preceding showdown, but given Tsipras is now a German lapdog, the only thing that matters is if no one can form a coalition.

If Syriza barely wins and Tsipras holds to his "no deal" stance, expect another election, with reforms delayed in the process.

Here is the pertinent question: Is Tsipras making a political statement that no deal with New Democracy is possible, or is that really his firm position?

Saga Not Over

Even if a grand coalition forms, the saga will not be over. Greece will never be able to achieve and sustain the primary account surplus it needs to honor the deal. Ultimately, what cannot be paid back won't.

Mike "Mish" Shedlock