Marcus Walsh-Führing / Jul 2019
Kyriakos Mitsotakis, prime minister of Greece. Photo: Shutterstock
European populists have a story to tell about the direction for Europe, and they are vocal about their opposition to EU intervention in national sovereignty. Populists from Viktor Mihály Orbán to Matteo Salvini have used the debate on national sovereignty as a rallying cry to leverage societal discontent.
For populist leaders to be successful, they need to be ready to create enemies and to defeat the liberal rhetoric from the opposition while the state needs to take on a paternalistic role by centralizing all state apparatuses. At the end of the day, it is the responsibility of the state to protect its citizens at all cost and from all enemies.
In the latest Greek elections, the moderate conservatives were successful in electing Kyriakos Mitsotakis, who ran on a traditional liberal message, as incoming prime minister. Will the Greek moderates be able to distance themselves from the far right and far left movements when challenging the status quo of EU monetary and fiscal policy in the Eurozone? The election results demonstrate a sign for hope in an ever polarizing EU political landscape.
If the moderate voices are to prevail, the new Greek government must present global capitalism and EU integration as opportunities to address the structural economic problems facing Greece. The new government must persuade Greek citizens to accept its policies with a moderate political rhetoric that pushes for economic growth and greater redistribution of wealth to incorporate society at large. In doing so, the role of the government must expand services to those areas of society that are the most in need. At the same time, the government cannot operate in a combative and destructive manner to generate economic growth.
The Greek government needs to provide security, employment skills, and promote a pluralistic society based on the European project. To convince Greek citizens to take another chance on the European project will not be easy, but it is a necessary evil to create economic stability in a country yearning for security. For this to occur, political progressives from centre- and left-leaning parties need to promote the political and economic benefits of European integration.
This is done through more regulatory reform and a bigger role of the EU in setting safeguards for civil society and competitive markets rather than for special interest. The promotion of more comprehensive regulation and competition in the domestic economy will provide the market with confidence to enact market liberalization.
To create meaningful reform, there will have to be greater economic stimulus for the European Central Bank (ECB) and a commitment from the Mitsotakis government to implement economic reform. Already, Mr. Mitsotakis has announced a reduction in the size of government and the installation of a minister of reform. At a moment where Greek citizens need more government assistance only time will tell if the incoming minister of reform will expand government to provide results that will appease the electorate and the EU.
Mr. Mitsotakis has also promised to cut taxes for the middle class, which will be met with resistance from international creditors and the EU. Instead of tax cuts, the Mitsotakis government should undertake comprehensive tax reform that holds businesses and multinational corporations accountable for tax evasion and avoidance. This would bring more revenues to the treasury coffers and offset intended middle class tax cuts.
If the Mitsotakis government holds corporations accountable for tax evasion and avoidance, it will create greater good will in the economy and align with European countries that lobby for further integration of monetary and fiscal policies. To create economic and job growth, Greece will have to create a more balanced deal with the Greek tax authority, international creditors, and the EU. The verdict is still out on the ability of middle class tax cuts to create greater balance and trust in the financial world. In the current political climate, the implementation of a tax cut for the middle class will not address the discontent across the globe on economic disparities and a system that benefits the elites.
Right now, there is a big ideological divide in Greece on which way to move forward. As the people of Greece have spoken, will the message of moderate politics address the needs and demands of Greek citizens?
In the past, moderate politics have been able to win over populism. Hopefully, the time has now come for Greece.