From the website of former Prime Minister of Greece George Papandreou, announcing the creation of a new political party, just in time for the snap Greek election January 25:
The time has come for the next big step. The time has come for us to build together the new political home that will house our progressive values, the values tha united us in the past and still do.
The Wall Street Journal, “Greek ex-Leader Sets New Party Before Vote,” January 3-4, 2015
Mr. Papandreou’s new party, tentatively called Movement for Change, has no chance of winning the election. Mr. Papandreou presided over the first iteration of the Greek debt crisis in 2010. He had to seek two international bailouts and impose painful austerity, destroying the popularity of his party at the time Pasok. So why is he running? It may be just an ego trip, but there may be more nefarious forces at work. The Syriza party currently leads in the polls. Its leader, Alexis Tsipras, wants to roll back austerity measures and restructure Greek’s debt.
The possibility of a Syriza victory petrifies the European Central Bank, the European Commission, and the International Monetary Fund, which put together the Greek rescue package. It also terrifies European political and banking elites, since banks have been carrying Greek debt on their books at full value. The Syriza “solution” would almost certainly force write downs and lower market prices for not just Greek debt, but other European peripheral debt as well.
So perhaps Mr. Papandreou was “induced” to form his party in the hope that he would siphon off enough votes from Syriza that it would lose the election. Mr. Papandreou would receive a sizeable deposit in an obscure bank account somewhere, Greek parties that want to abide by Greece’s austerity and debt commitments would form a coalition government, and Europe could pretend for a little while longer that much of its sovereign debt isn’t junk. See “Who’s Right,” SLL, 1/5/15, and stay tuned.
