Greece’s foreign policy metamorphoses - Part 2

The past 15 years have transformed Greek foreign policy, creating strategic alliances based on energy, defence and the Law of the Sea, but its biggest problem, maritime borders with Turkey, remains

This article is the second of three, originally written as a chapter for ‘Turbulence in the Eastern Mediterranean’, a strategic dossier published this month by the International Institute of Strategic Studies (IISS). It is presented here in full for the first time. Previously published: Part 1

Alexis Tsipras was elected Greece’s youngest prime minister in January 2015

4. Syriza: Indicate left, turn right

Prime minister Alexis Tsipras’ cabinet of leftists shook markets within hours of being sworn in, casting doubt on €11bn of planned privatisations. Those included major projects – the Piraeus Port Authority and Public Power Corporation, nine regional ports and 17 regional airports. More than 3,000 state sector employees made redundant under New Democracy would be hired back.

This barrage of declarations reinforced fears that Syriza was going to unravel five years' worth of difficult spending cuts and might lead Greece to a disorderly exit from its oversight programme overnight. The Athens Exchange lost nine percent of its value in a day^[1].

The instability continued for months as finance minister Yannis Varoufakis told his colleagues in the Eurogroup that Greece would no longer accept emergency loan instalments until its contract was renegotiated. Greeks began to withdraw savings in ever-larger amounts, and the Bank of Greece imposed capital controls on June 29. Bereft of leverage, the government caved in by July and accepted a third emergency loan.