The Greek left-wing Syriza party made history in the country Jan. 25 when it won elections, taking 149 seats in a 300 seat Parliament. The party’s leader Alexis Tsipras was sworn in as Greece’s new prime minister Monday. The process of forming a new cabinet has already begun. One of the major issues for the new government surrounds what will happen with Greece’s debt. Costas Panayotakis is professor at CUNY Graduate Center in New York City and author of the book Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy (Pluto 2011). Chris Spannos, host of teleSUR English’s “Imaginary Lines,” interviewed Costas for the show’s Feb. 2 episode. Below is an advance transcript of the forthcoming interview.

Chris Spannos (CS): First of all, can you explain the atmosphere leading up to last Sunday’s election in Greece and upon knowing that Syriza would win 149 seats? What do you think Greeks were feeling and thinking in those moments?

Costas Panayotakis (CP): I think there was a growing level of anger against the previous government. Basically, things were becoming more and more unbearable for people. The combination of austerity cuts and higher taxes had alienated vast segments of the Greek population; even among the base of the conservatives and especially the middle class that has been decimated and that had traditionally supported either the conservative or “socialist” parties that were part of the ruling coalition. So this was behind the result [a Syriza victory] and even polls before the elections show that significant segments of the base of the conservative party was moving over to the left-wing Syriza party. So this is part of the puzzle.

There was a sense toward Syriza that essentially said, “Let’s see what they can do.” And people realize that Syriza is going to find itself in a difficult situation and they don’t have necessarily very high expectations. I think that for large numbers of people the expectation is that as long as Syriza starts moving in a different direction and seems to be making an effort to change policies, people may actually be quite happy. I think that people are realizing how difficult the situation is.

Of course people on the left are exhilarated because this is a historic event for a left-wing party in Greece to win an election. It is especially historic in view of the background history of Greece and the fact that Greece went through a civil war immediately after World War Two and the Greek left was persecuted for decades.

So there are combinations of different types of feelings by different kinds of people. But there was a sense of people having had enough and the willingness to try something different. There was also a determination on the part of Greeks. They were not going to give in to the tactics of fear mongering that the conservatives tried to peddle. Conservatives had used fear successfully in 2012, but this time around it didn’t work. As a result we had this very impressive victory by Syriza.

CS: Because Syriza was two seats shy of winning a majority in parliament, the party has had to form a coalition with the right-wing Independent Greeks party. What does this mean for Syriza’s ability to carry out its program against austerity?

CP: Well the Independent Greeks are, I think, compatible with Syriza when it comes to the economic problem and the stance toward austerity. And of course that is the main issue that the Greek government is likely to face, especially in the early stages. But there are some issues having to do with that fact that the Independent Greeks are very conservative on other types of issues. So that is a problem and it could conceivably create tensions over social issues, perhaps foreign policy issues or issues having to do with immigration. So it is certainly not an ideal scenario, the fact that there is this coalition.

On the other hand some people in Syriza may see this coalition as a good thing, to the extent that they can use the coalition as an excuse when they have to make compromises, for example with the Europeans, and they cannot deliver on all the promises they have made. They can always refer back to the coalition as an excuse. So from their point of view that might be positive. But from my point of view that is precisely the problem.

I have also heard the concern that this might have an effect on social movements and the pressure they put on Syriza. Because I think that is something that Syriza itself has recognized. They are against this philosophy of representation where the citizens vote and then they expect from the politicians to make all the decisions and deliver the goods. But from my discussions, some people, activists on the ground, feel that when you have a coalition like that, this can have a sort of confusing effect on movements. Because if you have a government, that has a majority in Parliament, movements would be much more likely to push hard so that Syriza delivers on their promises. But some of this pressure might be deflected if there is a coalition and the Syriza leadership can say, “Well, you know, we would like to do all these things but, you know, we have this coalition partner and we have to make compromises.”

CS: A major plank in Syriza’s platform is to renegotiate Greece’s debt. What is the next step for debt renegotiation? What is an optimal scenario?

CP: There have been discussions in the past about trying to lighten the burden of the Greek debt and some moves have already been made in terms of lengthening the maturity of much of the debt and reducing the interest rates; and there may be steps, certainly, in that direction.

Syriza wants more than that. It doesn’t just want to lengthen the maturity of the debt and reduce interest rates, but it actually wants to, basically, have a haircut on the amount that is owed. It is also asking for a European conference on European debt, basically making the point that this is not just an issue of Greece’s, with its European partners, this is a European-wide issue.

There have been some interesting and encouraging responses in this respect. For example, from Ireland. It remains to be seen whether this will be successful. Of course there is a lot of resistance to this from European countries and especially Germany.

Greece is a small country and its debt is relatively limited so Europe can certainly afford to have a haircut on the Greek debt. But part of what they are afraid of, I think, is that if there is a haircut on the Greek debt then you may have other countries, like Italy for example or Spain, where the debt is much more significant, asking for the same thing. This is something that Germany and other European countries in the north will want to avoid. So it will be a struggle.

Perhaps the optimal scenario from the point of view of both sides would be a kind of compromise that both sides could live with. In the coming weeks and months we will have to see whether, indeed, such a compromise is reached and what it could involve.

CS: Looking at how other countries have managed their debt, Argentina defaulted on its debt and Ecuador was able to renegotiate its debt. How might these and other examples inform our understanding of what is possible with Greek debt?

CP: One of the things that perhaps distinguish the Greek case is that there has already been a restructuring of Greek debt. The Greek debt at the beginning of the crisis was held by European banks and private investors, and with the restructuring of the debt, now the debt is being held by what is known as the “official sector.” It is basically publicly held by different countries and European institutions, the European Central Bank and the IMF. That makes it kind of tricky because if there is another restructuring the cost would be borne not by private investors and banks but by the taxpayers of other countries. And one of the arguments that is being made against Syriza’s proposal is that you have taxpayers from other countries in Europe that may be even less well off than Greece and basically they are lending Greece money at very low interest rates, and they are able to lend this money by borrowing it at a higher interest rate. So they are making a loss. This makes things a little more complicated.

The discussion of the relevance of the Latin American case has been discussed in Greece. It was discussed especially at the early stages of the Greek crisis. There was a segment of the Greek left for example that saw Argentina as a positive example. But that is the segment of the left that favored, basically, unilateral default on the Greek debt and, essentially, Greece being willing to exit the Eurozone. This is not the official position of Syriza. Syriza does not want to exit the Eurozone or unilaterally default on the debt. It wants to change the European Union to try to move it away from the neo-liberal course that it has followed in the last few decades.

CS: One of the problems is that the EU looks like it is willing to play hardball with Greece to avoid what you mentioned before about Greece getting a haircut on its debt and that possibly leading to other countries wanting the same. If there are these two opposing views on how to renegotiate Greece’s debt and neither one is willing to move that much or back down, what is the possibility of a Greek exit from the Eurozone and what would a Greek exit look like concretely?

CP: I don’t think that either side would want Greece to exit the Eurozone because there would be risks involved for both Greeks and for Europe.

The Europeans like to say that they are better insulated from the effects of a Greek exit. They say that to sort of suggest that they could not be blackmailed by Greece and that their leverage is greater now than it used to be in 2012 and before then.

But it is not clear that the Europeans are as insulated from the effects of a “Grexit” as they would like to suggest. The views on this are divided, even among analysts outside Greece. There have been estimates of the cost of a “Grexit” that suggest that the cost would be higher than the cost of keeping Greece in the EU. So I think both sides will try to find a compromise that is as close to their interests as possible.

Also, the Europeans would try to put pressure on Syriza to continue the present policies with minor modifications. And Syriza, of course, is likely to try to achieve substantial changes to the policies that have been followed up to this point.

Of course, in situations like that there is always the possibility of an accident where you may have something going wrong and things falling apart even though the two sides might not be seeking that outcome.

CS: You mentioned earlier what you thought might be the effects of Syriza’s electoral victory on Greek social movements. What do you think it may mean for the moderate and far-right in the country? On the one hand former Prime Minister Antonis Samaras of New Democracy went from previously holding 129 seats in Parliament down to 79 in this election. The neo-Nazi Golden Dawn party is ranked with third most seats, 17, while some of their leadership is in prison. How do you interpret these changes for Greece’s right-wing?

CP: Well, I think this division will play out even in the conservative party. Because there is a more centrist liberal wing of the conservative party. Most of the previous prime ministers belong to that wing. And then there is part of the party that can be described as being hard-right and even flirting with the far-right. The outgoing Prime Minister, Samaras, is part of that second wing that was flirting with the far-right.

There was a time when Samaras and the people around him were considering the idea of a possible coalition between the conservatives and the neo-Nazi Golden Dawn party. So now that Samaras has lost the election it is possible that he may be challenged and one of the ways that this challenge to his leadership may manifest itself is along those lines, between what the future course of the party should be. Should it be a party that tries to win support from the center of the political spectrum or should it be a party that primarily wants to, basically, solidify the hard-right base, the population in Greece that belongs to the hard-right and has voted for other parties like Golden Dawn. So that is one of the ways that this division may play out.

Golden Dawn seems to have stabilized in terms of electoral support. Actually, it was even stronger in the European election a few months ago where it got almost 10 percent. So now its percentage has gone down significantly. Also its presence in the street has gone down significantly. Because of the criminal charges facing the leadership of the party, people are not as open about their allegiances to Golden Dawn.

But it is clear that the affects of this policy of austerity have been so devastating that they have created a permanent core of people willing to vote for a neo-Nazi, basically, criminal group that is willing to use violence and to scapegoat immigrants and other people for the deep social and economic problems that are plaguing people’s lives.

CS: Finally, looking foreword into the coming weeks and months, what can you say about the type of cabinet that Syriza will appoint and how ministries might be allocated and how they will be forming their government over this early period?

CP: Well, Tsipras has said that he will try to have fewer ministers, to have a cabinet that is not overly large. But of course each of the different ministers will have people below them. So that is part of it. There will be some representation of Independent Greeks. There are some reports that, for example, the leader of the Independent Greeks may become Minister of Defense. Also Tsipras has said that they may try to include in the cabinet people who are not just…, they will include of course Syriza leadership and deputies and so on, but they will also want to include people beyond [the party] who are not considered long-standing Syriza members or leaders. The argument is that they realize that this is a difficult situation and they want to unite Greeks and bring together all the people who want to start anew, give up austerity and try to rebuild the country after the social and economic devastation after the last few years.

CS: Thank you very much for joining me on “Imaginary Lines” Costa.

CP: It was my pleasure.

Costas Panayotakis is professor at CUNY Graduate Center in New York City. He is author of Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy (Pluto, 2011).

This interview is an advance transcript of “Imaginary Lines’” forthcoming Feb. 2 episode.

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