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What happened in Greece?

Syriza, Greece’s ruling party, is headed for electoral defeat, and to minimise the impact, the party may call early elections. Prime Minister Alexis Tsipras narrowly won a confidence vote in January, averting snap elections, but ever since his party became a minority government, the stability of his country has been at risk. Almost like we…

Greek Prime Minister Alexis Tsipras gives a press conference with his North Macedonian counterpart following their meeting in Skopje on April 2, 2019. – Greece’s prime minister landed in Skopje on April 2 for a historic visit to the newly renamed North Macedonia to join in marking the end of a decades-long identity row between the two countries. The one-day trip comes a month after Alexis Tsipras and his Skopje counterpart Zoran Zaev finalised the deal that added “North” to Macedonia’s name to distinguish it from a bordering province in Greece. (Photo by Robert ATANASOVSKI / AFP)

Syriza, Greece’s ruling party, is headed for electoral defeat, and to minimise the impact, the party may call early elections.

Prime Minister Alexis Tsipras narrowly won a confidence vote in January, averting snap elections, but ever since his party became a minority government, the stability of his country has been at risk. Almost like we are back where we were 10 years ago.

Greece’s total debt profile swelled by about 12 percent, and as a result, the economy suffered, resulting in the upending of the Greek political system, increase in social exclusion, and emigration of hundreds of thousands of well-educated Greeks.

The crisis started in late 2009, following the Great Recession. Structural weaknesses in Greece’s economy, and revelations that previous data on government debt levels and deficits had been underreported, the official forecast for the 2009 budget deficit was less than half the final value as calculated in 2010, while after a proper look, the 2009 government debt turned out to be €299.7bn, not €269.3bn.

This led to a crisis of confidence, indicated by a widening of bond yield spreads and rising cost of risk insurance.

Despite government austerity efforts to arrest the situation, which triggered protests, the country required bailout loans in 2010, 2012, and 2015 from the IMF, Eurogroup, and European Central Bank, and negotiated a 50% “haircut” on debt owed to private banks in 2011, which amounted to a €100bn debt relief. After a referendum which rejected further austerity, Greece became the first developed country to default on an IMF loan.

Syriza came to power in January 2015 promising to confront the “troika” — the European Commission, the European Central Bank, and the IMF — to secure an exit from the Greek debt crisis, and end the austerity under which Greeks were suffering.

Five months of high drama negotiations culminated in a national referendum in which the Greek people said a resounding “no” — “Oxi” — to the deal offered by the troika.

Yet in the face of this historic response, the economic realities forced Tsipras to sign a third memorandum resigning the country to ever deeper austerity and mounting privatisations. Tsipras’s unprecedented capitulation was followed by another: his decision to stay in power to implement the terms of the memorandum.

To many, Syriza’s rapid climb to state power, its tough talk in negotiations, and its feints towards “Grexit” signaled an acceleration of the class struggle in Greece. Its capitulation proved an abrupt end to that feverish process. Now the party lumbers on, zombie-like, dully implementing anti-worker and anti-left measures of historic magnitude.

There are lessons Nigeria can learn from Greece. For a start, populist politics is dangerous, and economic realities will eventually get in the way of the urge to please the masses.

However, as the politics of populism continues to swell across the developed world and beyond, the right-left divide of politics gives way to the “Us vs Them” politics that pits political upstarts against the establishment, with increasingly little concern given to actual policy overlap.

Think of how nominally capitalist politicians from the ACN wing of the ruling APC now sound distinctly socialist.

When the Syriza-Independent Greeks coalition government formed in 2015, it was considered an aberration born of unusually difficult circumstances; but here we are, four years later, and it’s become a minority government, but as Theresa May’s outreach to Jeremy Corbyn over Brexit shows, ideologically opposed political allies, like ACN/CPC, Syriza-Independent Greeks may have become a thing.

Another critical lesson the Greek ordeal has taught the world: In the 21st century, the economic troubles of the present can extend far into the future.

While most reports on Greece have understandably focused on the economic misery of the moment, the real tragedy of Greece’s lost decade of economic growth is that it will shortly become a lost generation of economic growth, even if the economy somehow manages to magically snap back to its pre-crisis levels.

Nearly 500,000 Greeks have fled the country in search of better opportunities abroad, and there is little hope of these people returning as they start their careers and families elsewhere.

This is not the first time there’s been a mass migration of Greek workers, but those leaving now are the most educated and capable individuals that the Greek educational system has produced. Their flight means that Greece’s already-broken pension system will be starved of the country’s most economically productive members, and will exacerbate a looming demographic crunch already in the making as the elderly and the young get left behind.

In a globalized world where the movement of people is now easier than ever (and particularly within the European Union), a country’s current economic missteps have the potential to reverberate for years to come.

Nigeria’s total debt profile swelled by about 12 percent from N21.725tr in 2017 to N24.39tr in 2018 according to the Debt Management Office.

Like Greece, we are largely using this debt to play populist games. There is an increase in social exclusion, and the emigration of many well-educated Nigerians.