Right after the financial crisis, Greece's center-left party was in firm control of the country, having won the 2009 elections with 38 percent of the vote. But a few years later, PASOK was all but destroyed, falling to a mere 5 percent of the vote in 2015. The reason was eurozone elites' favorite policy, austerity, which pushed Greek unemployment up past 20 percent for over four years and counting. As Herbert Hoover could tell you, it's not so great for one's political fortunes to be in command of government during a full-blown depression.
The exact same process has now happened to Syriza, the Greek leftist party that came from virtually nothing to an outright victory in 2015. But after months of fighting with eurozone elites, Syriza leader Alexis Tsipras blinked and backed down in July of last year, and yet more austerity was stuffed down Greece's throat. As an obvious consequence, Tsipras' favorability rating has plummeted to 17 percent, with 85 percent government disapproval. The Greek political table is now set for any party bold or extreme enough to try what Tsipras dared not. Fascists are the most likely candidate.
Let's recall how Greece got to its present situation. The 2008 crisis left Greece with a totally unpayable load of debt, the result of irresponsible budgeting from previous Greek governments on the one hand and equally irresponsible lending, mostly from French and German banks, on the other. But instead of granting Greece an orderly partial default, so that it could take a sharp economic blow but be placed on a road to eventual recovery, eurozone elites used Greece as a scapegoat for their own failure to properly supervise their banking system. They pushed through several non-default "bailouts" of Greece, virtually all of which was a camouflaged rescue of lender banks, and covered their domestic political flanks by forcing tremendous austerity on the Greek people. That, plus the fact that the common currency means no devaluation to try for export-led recovery, plunged Greece into depression.
Syriza came to power promising to end austerity by any means at hand. Aside from Tsipras, the key figure in this effort was the Finance Minister Yanis Varoufakis, who argued endlessly with the Eurogroup (the club of eurozone finance ministers) that Greece's economic situation was untenable and some relief must be arranged.
He made no progress whatsoever. After some months of negotiations, Syriza and the eurozone elite class reached a crisis point. The elite mounted a multi-pronged economic attack on Greece to coerce Syriza to surrender, most notably in the form of a bank run deliberately caused by the European Central Bank. In response, Syriza held a referendum on austerity, which they won handily. Varoufakis presented a plan to partially quit the eurozone and forcibly wrest control of the Greek economy back into Greek hands. But Tsipras didn't believe this would work, and so accepted the brutal elite terms. In that moment, the eventual political doom of Syriza was sealed.
After quitting government, Varoufakis came to believe that all the endless arguments he'd had with eurozone elites were nothing more than a delaying tactic to string out Greek negotiators so the economic attacks could have time to bite. It was bad faith from the beginning, he said, and everything that happened in 2015 bears out this perspective.
However, Varoufakis' plan is still lying there, untried. As economist J.W. Mason explained at the time, a restoration of Greek economic sovereignty without a complete break from the euro isn't too hard to imagine. Despite the common currency, the old Greek central bank is still around, complete with euro-printing capability, conducting the day-to-day operations of eurozone policy. Therefore, any anti-austerity program would involve seizing the Bank of Greece, announcing a backstop of all Greek bank deposits and Greek government debt, and simultaneously slamming down capital controls to prevent money fleeing the country. Once that is secure, massive fiscal stimulus would then be put through — largely by reversing previous cuts — paid for by new debt, whose interest rates will be kept down by the central bank. Old creditors will be presented with a choice between a new debt swap or repudiation.
If this can be executed successfully, there will be immediate and explosive growth, restoring full employment within a few years. New tax revenue will come pouring into the Greek treasury, freeing up money for other priorities.
One of the many crushing disappointments about Syriza's inability to pull this off is how they inadvertently plowed the road for fascists to do it. The plan is there, and now so is the knowledge that utter duplicity and contempt for democracy on the part of eurozone elites must be assumed. If Greek sovereignty is to be restored, the Varoufakis plan will have to be rammed through in the middle of the night, after being carefully prepared in secret.
The failure of Syriza has discredited the far left, and so a turn to the far right is typically the next choice for a desperate and suffering electorate. The fascist Golden Dawn is already the third-largest party in Greece, pulling in 7 percent of the vote in the September 2015 snap elections. As Syriza's polling has steadily collapsed, Golden Dawn's has increased to about 10 percent (the center-right opposition has also picked up support). That's still not very much, but politics tends to be highly unstable in a depression-stricken country. Witness the Nazi party, which leaped from 3 percent support in 1928 to 37 percent in 1932. Syriza itself polled less than 5 percent in 2009. And especially given how hard the refugee crisis has hit Greece, it's hard to imagine a more fertile climate for fascist mobilization.
The next Greek election will happen sometime on or before October 2019, giving the fascists ample time to organize. When that comes, I expect a large fascist showing — perhaps an outright victory, perhaps in coalition with the center-right, the traditional route to fascist success. From there, it's merely a question of whether they can manage the confidence and competence to seize back their economic sovereignty, thus creating a recovery which would ensure the lasting popularity of Greek fascism, and blazing a trail for fascists in the other suffering eurozone countries.