Will the new government be able to restore Greece’s economy?

(VOVworld) – One month after his resignation Greek Prime Minister Alexis Tsipras has returned to power with a landslide victory in the September 20 election. His new government will face the challenge of restoring Greece’s economy, dealing with massive migration, and building public trust in Greece’s future.

Tsipras’s Syriza Party won 145 out of 300 seats in parliament. This result shows that a plurality of Greek voters want Greece to remain in the Eurozone and pin their hopes on Tsipras’ policies and a more united parliament.

Wise move

Tsipras resigned a month ago to pave the way for a snap election. Analysts said his resignation was no surprise and wisely allowed him to return to power without opposition from dissident Syriza Party members. Back in power, he will have an opportunity to discard opposing elements in the Syriza Party and build a more effective Parliament.

As President of the Syriza Party, Tsipras is entitled to make a list of Party members without the approval of a Party congress. This will make it easier for him to clear out the far-left elements who often criticize his policies. The snap election gave them no time to prepare the establishment of a new Party before the parliamentary election. If the election had been held after September, Tsipras would have found it harder to win support because a number of austerity measures including tax increases and reduced social allowances will take effect in October.

Gloomy economy

Economists say that despite the election result Greece needs a bailout package; otherwise, it will be unable to pay its long-term debts. Greece has a 25% unemployment rate and a deteriorating industrial sector.

Since 2010 the Greek government has tried in vain to stave off a full-blown economic crisis. Unemployment, foreign debts, and social instability have risen. Tsipras’s previous government was criticized by both the far-left and far-right for failing to rule the country and surrendering outright to Greece’s creditors.

Challenges await

Athens now needs a government competent to solve the problems ahead. Prime Minister Tsipras and his new government will have to undertake reform measures to revive the economy, pay down foreign debts, and assuage public anger over austerity measures.

Only 54% of Greek voters participated in the September 20 election, the lowest turnout in 70 years. This demonstrates widespread frustration and unwillingness to continue the austerity measures. But there appears to be no alternative to Tsipras’s policy of accepting unfavorable agreements with international creditors in return for a bailout.

From now until the end of the year Greece must continue its reforms, which are a prerequisite for obtaining a third bailout worth 97 billion USD. Greece needs to quickly stabilize its economy and politics and this will be a big challenge for Tsipras and his new government.