by Maria Petrakis | 3:01 PM PST | February 26, 2015
(Bloomberg) -- “A Day with Yanis Varoufakis,” a satirical post doing the rounds on social media, shows the Greek finance minister spending his waking hours feted by adoring fans. He goes to sleep and is jolted awake by a nightmare of German Finance Minister Wolfgang Schaeuble cackling.
In what’s turning that nightmare into reality, Greece’s month-old anti-austerity government led by Prime Minister Alexis Tsipras had a rude awakening last Friday when German-led pressure forced it to pedal back on most election pledges in the face of national insolvency. On the streets of Athens, Greeks used to political flip-flops in the five years of their odyssey to financial health are taking what has been a capitulation in their stride.
“When you have your hand outstretched and they say there’s no money, that’s when you put your hands up in the air,” said Alexandra Dimopulos, 60, a retired civil servant. “You may have all the good intentions in the world but that means nothing when you have no money for them.”
Tsipras huddled with his lawmakers in the parliament on Feb. 25 for more than 10 hours after euro-area partners signed off on a Greek commitment to a four-month loan extension based on promises the government would stick closely to the bailout plan it had pledged to the country’s citizens it would tear up.
While ordinary Greeks say they appreciate the government’s efforts to argue their case, albeit unsuccessfully, the reversal may test the unity of the ruling party, which teamed up with a smaller anti-austerity group to win the majority it needed to govern. Manolis Glezos, a 92-year-old Syriza European Parliament lawmaker and World War II resistance veteran, has already criticized the agreement.
“The biggest challenge for the government right now is not the rather tame opposition in parliament, it is the opposition inside the senior party Syriza itself,” said Jens Bastian, a former member of the European Commission’s Greek task force, in a Bloomberg TV interview. “How you manage expectations among that constituency, that will be the real challenge.”
Varoufakis evoked the Odyssey, the ancient Greek poem by Homer that former Prime Minister George Papandreou referred to in 2010 when he accepted cuts to wages and pensions in return for what would become 240 billion euros ($269 billion) in loans from euro-area partners and the International Monetary Fund.
“Sometimes like Ulysses you need to tie yourself to a mast in order to get to where you’re going and to avoid the sirens,” said Varoufakis. “We intend to do this.”
Papandreou’s support and ability to pass austerity measures demanded by the country’s creditors was whittled down one seat at a time amid violence and riots and protests by tens of thousands of Athenians camped in front of Parliament until he lost power at the end of 2011.
Greeks don’t want to see a return to those days.
“There are always reactions within parties, in all parties when things don’t go according to plan,” Paraskevi Psyhidou, 50, who owns a souvenir store in the old neighborhood of Plaka. “I am hoping for a good Easter, no problems, no upheaval.”
Polls show support for Tsipras surging since he won elections, providing a wellspring of support among the public even amid rumblings from his party cadres.
A Feb. 22 Public Issue survey of 1,008 people questioned between Feb. 12 and Feb. 17, before the agreement was reached in Brussels, showed 64 percent believed the country to be on the right path, a finding that was the highest in at least 20 years, according to the pollster. Three times as many people supported the direction the country was taking after the election as did before the vote.
Feelings of hope and optimism soared to 29 percent from 10 percent before the election. Tsipras has a personal approval rating of 87 percent, climbing 42 percentage points after his election.
“At least they’re trying to negotiate,” said Konstantinos Velounakis, 55, who owns a jewelry store in central Athens, and didn’t vote for Tsipras. “I hadn’t seen that before. They’ve put the word out that we’re not all in the same boat, north and south, and that’s good.”
The public support may be critical to Tsipras’s ability to stick to the agreement reached with euro-area partners.
While the main sentiment in Greece is hope, in Brussels the word being bandied about is “trust”. The euro-area finance ministers had barely approved the Greek outline of plans to appease creditors, when European Central Bank President Mario Draghi and IMF Managing Director Christine Lagarde heaped on more pressure.
Draghi said the key to Greece winning more funding were “commitments” on legislation. Lagarde pressed for specifics and “clear assurances” that reforms will happen.
For some Greeks, that kind of pressure means the government will be forced to put in place measures they have been opposed to.
“They said one thing and are doing something different -- this is to be expected,” said Psyhidou. “We don’t have the money. The Odyssey is not finished yet. We have a way to go.”
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