Reuters: Divisions, public pressure push Greek PM into tightrope act

First it was for sale, then the deal was scrapped, then the sell-off was back on and now it is to be a joint venture, or maybe not.

Few issues sum up the confusion of leftist Greek Prime Minister Alexis Tsipras’s first two months in office better than the bewildering saga of the country’s biggest port, Piraeus, a bastion of militant trade unionists.

His government’s first declaration in January was to say the asset sale – a key part of Greece’s privatization program agreed with international creditors – had been canceled.

Athens then appeared to change heart: on a trip last month to China, which is a bidder and already runs part of the port, the deputy prime minister said the sale would go ahead.

Three days later, the economy minister appeared on television to insist the sale remained halted and that a joint venture would be agreed instead. The same day, Greece sent its lenders a list of reforms that cited the Piraeus port sale as among the privatizations going ahead.

Whether the port is actually open for bidders is anybody’s guess. Indeed, it is not clear if the government itself knows, given the multitude of contradictory statements that has come to characterize Tsipras’s administration.

The message is equally confused in talks with foreign creditors that affect the financial survival of the cash-starved Greek state, one European diplomat involved in talks said.

“It is as cacophonic as it seems,” the diplomat said.

Inability to agree – much less implement – a common line on privatizations underscores the challenges Tsipras faces to convince lenders his government is committed to reform and worthy of financial aid.

With Athens weeks away from running out of cash, Tsipras has called for an “honest compromise” and held a series of fence-mending meetings with European leaders that have helped lower the tone of acrimony with the euro zone and IMF.

But the novice prime minister has to juggle divergent voices within his own Syriza party and has little room to offer major concessions without undermining support from the public, his party’s far-left flank and his right-wing coalition partner.

Losing any of the three could bring a government collapse. As if to underscore the point, Panagiotis Lafazanis, the outspoken head of Syriza’s far-left faction, warned this weekend that any retreat from anti-austerity and anti-bailout pre-election promises would be suicidal.

“The government will stand firm on its pledges in the face of vile blackmail and disorienting dilemmas not because of party pressure but because such a retreat would be a real ‘Waterloo’ for the government,” Lafazanis, who is energy minister, told the Agora newspaper, invoking the fall of French Emperor Napoleon.

In an early sign of dissent, about 30 out of 149 Syriza lawmakers voiced doubts at a closed-door meeting about a Feb. 20 agreement with lenders that averted a banking collapse, though only a handful opposed it in the end, Syriza officials say.

A fresh impasse with lenders and internal rifts are spurring media speculation that Tsipras may have to call early elections or a referendum to avoid caving to lenders’ demands, though his government denies any such plan.

Even as Greece teeters closer to the financial abyss, there is scant public debate about what might come next. Almost no one publicly advocates defaulting on Greece’s 240 billion euro debt to the euro zone and the International Monetary Fund.

Reuters