NYT: Greece, Seeking Dose of Stability, Is Rattled by Trump’s Win


Before last week, Greece expected that it might benefit from what was supposed to be a triumphal valedictory lap by President Obama as he lands in Athens on Tuesday to kick off his final world tour.

Mr. Obama has been supportive of Greece’s efforts to get its finances in order, and of Europe’s bid to keep Greece stable. Prime Minister Alexis Tsipras hoped that Mr. Obama, who travels to Berlin on Thursday, might even persuade the German chancellor, Angela Merkel, to offer Greece some debt relief by the end of the year.

But that possibility has all but evaporated with the victory of Donald J. Trump.

Instead, Mr. Obama will arrive in Athens with his legacy threatened and his leverage sorely reduced. His visit has turned into yet another reminder of the ways in which Mr. Trump’s ascendancy is changing the calculations of leaders across Europe. Mr. Tsipras is among the most vulnerable of them.

“The expectation was that Obama would relay a message about how impressed he was with Greece’s progress,” said Jens Bastian, an economics consultant based in Athens and a former member of the European Commission’s task force on Greece. “But given that Trump will assume the presidency, all bets are off.”

Indeed, Mr. Trump has urged Europe to take care of its own problems, and he suggested during the height of the Greek crisis that the United States should not get involved.

“I would definitely stay back,” he said in an interview last year with Fox Business Network. “Germany is very powerful and strong. I’d let Germany handle it.”

“We have enough problems,” he said, adding that President Vladimir V. Putin of Russia could ride in “to save the day if Germany doesn’t.”

For Greece, in the worst case, a failure to secure debt relief before Mr. Trump is sworn in could spell a new round of political and economic instability, with implications for the wider European Union.

Even before Mr. Trump’s victory, Mr. Tsipras’s troubles had mounted all year. His popularity plunged after his government snapped in place new pension cuts and tax increases to appease his nation’s creditors, further angering beleaguered Greeks.

The risk now is that Greece could re-emerge as a weak link in the eurozone, as pivotal elections in several European countries next year may shift the focus from stabilizing Greece.

Europe’s currency bloc already came close to fracturing last year when Mr. Tsipras veered toward pulling out of the euro. Since then, his fragile government has been managing the moribund economy under a new financial bailout with harsh austerity terms.

Under the deal, Mr. Tsipras won pledges from creditors to relieve some of Greece’s large debt, and he is angling to strike a concrete accord in early December.

“The danger is that if this drags on to next year, the issue remains open, and that’s a nightmare for the Greek government,” said Nick Malkoutzis, the editor of Macropolis, a political analysis website. “It will lead to heightened uncertainty and renewed speculation about whether Greece will continue in the eurozone.”

While the eurozone has held together despite Greece’s troubles, Mr. Trump has also hinted that he sees the shared currency as a potential threat. “Don’t forget the whole euro situation was created to compete against the United States,” he said in the Fox Business interview. “This was all set up to hurt the United States.”

Whether Mr. Trump takes that view to the White House remains to be seen. “He draws a red line,” Mr. Bastian said. “But how thick that red line is, is anyone’s guess.”

With the popularity of Mr. Tsipras’s leftist Syriza party plummeting, he has been insisting that Athens is gearing up for a firm commitment on debt relief on Dec. 5, when eurozone officials are to discuss Greece’s situation.

The International Monetary Fund, of which the United States is the largest member, has called on Greece’s creditors to be flexible, warning that the country cannot meet its budget-tightening goals if the debt load is not reduced. Germany remains skeptical of cutting Athens more slack.

Mr. Obama has repeatedly underlined the need for debt relief and a shift away from austerity, and Greek officials believed Hillary Clinton would have adopted the same stance.

Greece’s government spokesman, Dimitris Tzanakopoulos, expressed optimism that the debt issue would be resolved before Mr. Trump assumes office, and he added that the government was not worried about a shift in Washington’s stance on the Greek debt issue. “We don’t think that there will be any discontinuity,” he said.

Others take a darker view.

“Trump’s policy will certainly be different to Obama’s,” Georgios Kyrtsos, a member of the European Parliament from the conservative New Democracy party, told state radio after Mr. Trump’s victory. “As regards Greece’s debt, I don’t think Washington will exercise any pressure for restructuring.”

Should creditors decide that Greece has not done enough to satisfy the terms of its bailout, and push a decision on debt relief into next year, the chances of securing a deal become ever fainter.

Negotiations for Britain’s withdrawal from the European Union will start in earnest in 2017, draining the appetite of European leaders for having to deal with Greece’s problems yet again.

In addition, elections will be held in Germany, France and the Netherlands, where Mr. Trump’s rise has fueled ambitions by right-leaning parties who see in his victory a chance at their own, and who have little patience for giving Greece more financial aid.

A similar headache awaits Mr. Tsipras amid concerns that Mr. Trump’s victory will embolden the neo-Nazi Golden Dawn political group, which remains Greece’s third most popular party, even though its leaders are on trial for a string of crimes including attacks on migrants.

Golden Dawn hailed Mr. Trump’s election as a victory against “illegal immigration” and in favor of “ethnically clean states.”

With so much uncertainty washing over Europe, Ms. Merkel may opt to push for preserving as much stability as possible on the Continent while she can.

“Merkel may wish to ensure that, at a time when so much has become unpredictable, stability is guaranteed, which would mean doing a deal on Greece,” said Mujtaba Rahman, the managing director for Europe of Eurasia Group, a political risk consultancy.

Source: New York Times