Greece’s Long Winter

An early election would signal how much reform voters will support.

The Wall Street Journal

Dec. 19, 2016 7:11 p.m. ET
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Europe has a packed election schedule for 2017, and it’s set to grow more crowded if Greece holds another vote. The snap parliamentary poll that looks increasingly likely won’t solve the country’s economic problems, but at least the exercise would have the virtue of clarifying for Greeks and the rest of the eurozone how much reform Athens will be able to undertake.



A trigger for the election would be the breakdown in talks between Athens and its creditors over the latest periodic review of the country’s 2015 bailout. Prime Minister Alexis Tsipras surprised creditors this month by offering 1.6 million Greek pensioners bonus Christmas payouts between €300 ($314) and €800, and suspending consumption-tax increases on some islands.

Mr. Tsipras says he can afford these measures because revenues have exceeded expectations. But under the bailout’s terms, he was supposed to secure creditors’ permission before making such outlays. The Prime Minister is making a last-ditch bid to buy electoral support ahead of elections that his far-left Syriza party will probably lose. The gambit is fiscally reckless, but Mr. Tsipras has little reason not to try.

He has barely made any progress negotiating with creditors over debt reduction. The European Union and International Monetary Fund continue arguing with each other over which fiscal-surplus targets and debt level are most conducive to pretending that Greece could one day meet its financial obligations unaided.

The IMF may be right that it will be harder for Greece to grow out of its debt while maintaining a fiscal surplus of 3.5% of GDP as the EU wants. But all the numbers are imaginary without extensive policy reforms that no Greek government of any party has been able to deliver, and which voters have resisted and creditors have shown they can’t or won’t enforce.

Another election will help Greeks grapple with the need for those reforms. The likely winner would be the center-right New Democracy Party that Mr. Tsipras ousted in January 2015. The party has a new reform wing under leader Kyriakos Mitsotakis, who proposes hitting fiscal targets by cutting tax rates and spending instead of merely raising taxes. He also wants to implement supply-side reforms such as privatizations in a big bang at the start of his term to rebuild confidence among creditors and investors.

These are still minority views within his own party, but a campaign would be a chance to build support among voters who by now have tried everything else to revive their economy.

A new Greek election would coincide with parliamentary votes next year in Italy, the Netherlands, France and Germany. A new election would be a signal of whether Greek attitudes are changing—and an opportunity for voters elsewhere to decide, when they choose their leaders, if they’re ready to bless Greece’s answer with more of their own taxpayer money for debt forgiveness or other concessions.